What is the definition of "disability" in this context?

VAT law provides certain reliefs for people who are "chronically sick or disabled". "Chronic" is taken to mean lasting a long time and therefore excludes injuries of a temporary nature. However, a long term condition does not, of itself, determine whether someone is chronically sick or disabled. For example, not all those suffering from long term back problems will be chronically sick or disabled; some will and some will not, depending on the severity of the problem. "Disabled" is also taken to refer to a long term condition and includes mental disabilities. Relief under this provision is not restricted to those who are registered as disabled persons.

Are disabled people automatically exempted from VAT?

No. There is no blanket exemption from VAT for disabled persons.

Why can't everything supplied to disabled persons be relieved from VAT?

When VAT was introduced into the UK it was agreed that disabled persons should not have to incur the tax when buying items designed solely for their use or when having equipment adapted so they would be able to use it. This basic principle still stands and as a consequence zero-rating does not extend to all goods and services supplied to disabled persons. Moreover, the UK has agreed not to extend its existing zero-rates.

What goods can be relieved from VAT when supplied to disabled people?

The following goods may qualify for relief:

• some medical and surgical appliances
• certain adjustable beds, chair lifts, hoists, lifts and sanitary devices
• emergency alarm call systems
• specifically designed, or adapted, vehicles and boats, and
• other equipment and appliances designed solely for disabled persons.

Certain conditions must be adhered to in order for these supplies to qualify for zero-rating. These conditions include; the design or adaptation of the item, the supply being made to a disabled person for their domestic or personal use and the receipt of an eligibility declaration form.

What services can be relieved from VAT when supplied to disabled people?

The following services may qualify for relief:

• installing zero-rated equipment which has been designed solely for use by a disabled person
• adaptation of goods to suit a disabled person condition
• repair and maintenance of equipment designed solely for use by disabled people
• certain building alterations.

What if I hire or lease goods?

The leasing or hiring of certain items, for example wheelchairs and motor vehicles leased under the Motability scheme, may be zero-rated subject to the conditions outlined in Notice 701/7 VAT reliefs for disabled people

What evidence is required to justify the zero-rating of these goods and services?

In all cases the customer must be eligible for the VAT relief and the supplier needs an eligibility declaration to this effect. You will find examples of eligibility declarations at the rear of Notice 701/7 VAT reliefs for disabled people

Source: HM Revenue and Customs

More information from the Directgov website

Download HM Revenue & Customs guide: VAT reliefs for disabled people (PDF 630KB)

Download HM Revenue & Customs guide: Motor vehicles for disabled people (PDF 120KB)