VAT is a tax that you pay as a consumer when you buy goods and services in the European Union (EU), including the United Kingdom. In the UK the standard rate for VAT is 20 per cent.
Disabled people don't have to pay VAT when they buy equipment that has been designed solely for disabled people, or on the adaptation of equipment so they can use it.
Also, VAT is not charged on certain services provided to disabled people, including some building work to adapt a disabled person's home and the hire of disability equipment like wheelchairs.
Goods and services on which you don't have to pay VAT are often referred to as 'zero-rated' or 'eligible for VAT relief'.
The rules about VAT reliefs for disabled people are complex. Not everything that is supplied to disabled people is zero-rated for VAT.
Who is eligible for VAT relief?
VAT law states that you must be 'chronically sick or disabled' to qualify for VAT relief.
A person is 'chronically sick or disabled' if they:
- Have a physical or mental impairment that has a long-term and severe effect on their ability to carry out everyday activities
- Have a condition that doctors treat as a chronic sickness (like diabetes, for example).
or
A person with a temporary injury like a broken leg would not qualify, nor would a frail older person who was otherwise well and non-disabled.
If you do not qualify for VAT Exemption then you would pay VAT at 20 per cent. For example, if the product price was £10.00 with VAT Exemption, you would pay £10.00 + 20 per cent VAT which would equate to £12.00.
