One of the ways disabled, handicapped or chronically ill people can save money on purchasing a mobility scooter is through VAT.
VAT (Value Added Tax) is payable by consumers on many different consumer goods at a rate of 20% in the United Kingdom.
Disabled people don’t have to pay VAT when they purchase equipment especially designed for the disabled and that includes mobility scooters.
VAT is also not payable on certain services such as building work at their homes to make their homes more easily accessible ensuring a better quality of life. Wheelchairs hired by disabled people are also VAT free.
Rules and regulations when it comes to VAT relief are complex and not every purchase, rental or service is automatically VAT free. For more information on who qualifies for VAT exemption please read the paragraphs below.
Who is Eligible for VAT Exemption & Relief?
VAT law states the individual must be chronically sick, handicapped or disabled to qualify for VAT relief.
A person is chronically sick, handicapped or disabled if they have a physical or mental impairment that has a severe and long term effect on being able to carry out everyday activities without any aids or if they have a long term illness such as diabetes or are terminally ill.
People with temporary problems such as a broken leg would not qualify or a frail older person who has been in good health for most of their lives do not qualify either. It is possible however to pay just 5% VAT on mobility scooters for the frail and elderly.
Goods and services qualifying for VAT relief are for domestic and personal use only and not for business premises or even nursing homes needing ramps and disabled bathrooms do not qualify either. Only people living in their homes qualify for goods and services which are exempt from VAT.
On the other hand registered charities do qualify for VAT relief. Not all charities will be registered for VAT free goods so it is important to check that they do qualify before making purchases or hiring equipment from them.
What Goods and Services are VAT Free?
There are many different goods and services that are VAT free for people that are chronically sick or disabled such as wheelchairs, artificial limbs, electrical or mechanically adjustable beds, kettle tippers, stair lifts, computer hardware and software especially designed for disabled and handicapped people as well as vehicles which have been adapted for the physically disabled.
Disabled people can also make use of many services and not pay the applicable VAT. Services exempt from VAT includes installation, maintenance and servicing of disability equipment. Adaptation work on equipment or appliances that make them user friendly for the disabled, building alterations and the hire of disability equipment.
Typically work done on a person’s home who is disabled would include building ramps allowing for easier access as well as widening doorways, passages to make accesses easier to bathrooms. Bathrooms, lavatories and shower rooms also qualify for VAT free work. Building work can also include gardens, yards and outbuildings. Lifts and stair lifts are also included.
How Does VAT Exemption Work?
Before paying for any product or service the consumer needs to check if the product qualifies for a zero rating and that the supplier is VAT registered. The consumer will be asked to sign a declaration form that they have a chronic illness and disability as well as confirming what type of illness or disability the consumer has. Proof of the disability or chronic illness may also be asked for such as a doctor’s certificate.
The consumer will also be asked to sign a declaration that the items purchased are only for personal and domestic use. The supplier will have copies of these forms that the consumer will be asked to sign. In the event that the equipment is a necessity for a child, then the parent, guardian or doctor can sign the declaration form on their behalf. Orders placed on the internet or on the phone will be dispatched on receiving the completed and signed forms.
The consumer will not have to claim the VAT back but instead will just pay the price at the till minus the applicable 20% VAT which is quite a saving. For more information and perhaps questions that haven’t been answered on this topic can be answered by the National Advice Service of the HM Revenue & Customs.