Who can buy zero-rated goods and services

VAT reliefs for disabled people are not means-tested. They are not dependent on the benefits a disabled person may or may not get and a person does not have to be registered disabled in order to qualify. You can only zero rate supplies to:

disabled people – see paragraph 3.2
charities – see paragraph 3.3

As a supplier you should take reasonable steps to check that your customer is eligible to receive your goods or services at the zero rate.

Supplies to disabled people

You can only zero rate supplies to disabled people when the:

person is ‘chronically sick or disabled’
goods or services are eligible for VAT relief – see section 4
goods and services are bought or acquired for their personal or domestic use – see paragraph 3.4

What ‘chronically sick or disabled’ means

A person is ‘chronically sick or disabled’ if they are a person with a:

physical or mental impairment which has a long-term and substantial adverse effect on their ability to carry out everyday activities
condition which the medical profession treats as a chronic sickness, such as diabetes

It does not include an elderly person who is not disabled or chronically sick or any person who’s only temporarily disabled or incapacitated, such as with a broken limb.

If a parent, spouse or guardian acts on behalf of a ‘chronically sick or disabled’ person, your supply is treated as being made to that ‘chronically sick or disabled’ person.

HMRC cannot offer any specific advice about whether or not any particular individual customer is chronically sick or disabled. See paragraph 3.6 and paragraph 3.9 for further information about customer eligibility.

Supplies to charities

You cannot zero rate all of the goods and services listed at paragraph 2.4 to all charities. So you should take extra care in checking that a charity is eligible for VAT relief before zero rating your supply.

Supplies of goods listed at paragraph 2.4 to charities will only qualify for VAT relief where the goods are made available by the charity to a disabled person for their personal or domestic use – see paragraph 3.4.

There are certain other circumstances when supplies of goods listed at paragraph 2.4 will qualify for VAT relief – see How VAT affects charities (VAT Notice 701/1) and Charity funded equipment for medical and veterinary uses (VAT Notice 701/6).

Charities

A body is considered to be a charity if it has charitable status.

To have charitable status, charities must be:

based in the UK, Isle of Man, an EU member state, Iceland, Liechtenstein or Norway
established for charitable purposes only
registered, excepted or exempted from registration with the Charity Commissionin England and Wales, the Office of the Scottish Charity Regulator (OSCR) in Scotland or invited to register by the The Charity Commission for Northern Ireland
run by ‘fit and proper persons and
recognised by HMRC

More information on charitable status and VAT reliefs available for charities is contained in How VAT affects charities (VAT Notice 701/1).

What ‘domestic or personal use’ means

‘Domestic or personal use’ means that the supply is needed specifically for the use of a disabled individual or series of disabled individuals.

The following are excluded from the term ‘domestic or personal use’, and not eligible for VAT relief:

goods and services used for business purposes
supplies of eligible goods made widely available for a whole group of people to use as they wish, for example, a stair lift installed in a charity building and made available for the general use or convenience of all those chronically sick or disabled persons who might need it, rather than for the personal use of specified individuals
goods and services supplied to:
an inpatient or resident of a hospital or nursing home
any person attending the premises of a hospital or nursing home for care or treatment
any other person or commercial establishment, with the exception of a charity, where the goods are for use by, or in connection with, care provided to an inpatient or resident of a health institution or to a patient whilst attending the premises of a health institution where the items are intended for use in the care or treatment provided in the relevant hospital, nursing home or health institution

For more information see Health institutions supplies (VAT Notice 701/31).

Who must pay for the eligible goods and services

As a general rule, anyone can pay for the eligible goods and services. But there are special rules that apply to supplies of certain types of equipment paid for or arranged by:

the National Health Service (NHS)
non-charitable hospitals
certain other non-charitable institutions that provide nursing or residential care

For more information on these rules see Health institutions supplies (VAT Notice 701/31).

Evidence you should hold to show your customer is eligible

HMRC does not supply an ‘exemption certificate’ to the customer for this purpose. But you should get a written declaration from each customer confirming that the person is entitled to VAT relief. This should hold enough information to demonstrate that a customer fulfils all the criteria for eligibility. HMRC cannot say whether a person is chronically sick or disabled.

The declaration should be separate, or clearly distinguishable from, any order form or invoice against which the goods or services are supplied.

A customer signing an order should not automatically be signing a declaration of eligibility for VAT relief.

There’s a suggested template declaration form that may be copied or otherwise reproduced by you or the customer.

There is no need to get such a declaration from a disabled customer who’s buying eligible goods or services funded by the Disabled Student’s Allowance (DSA). This is because only eligible persons are entitled to DSA. Keep evidence that the goods or services were funded by DSA.

Oxygens, Excelsior House Mucklow Hill Halesowen B62 8EP

BOOK HERE

First Name

Last Name

Telephone

Message

We're committed to your privacy. Oxygens.co.uk (Applied Technology Ltd) will use the information you provide to administer your enquiry and supply the information requested. We may also keep you advised about other relevant guides, content, products, offers, and services. You can of course unsubscribe from these communications at any time. For more information, see our full Privacy Policy.