VAT relief on goods, services and building work

Introduction

Anyone disabled does not have to pay Value Added Tax (VAT) on certain goods and services that are solely designed to assist some one with a disability or long-term illness. Some building work may also be VAT free.

How VAT relief works

If the goods or services qualify for VAT relief, the supplier should not charge VAT. It is not a case of paying the VAT and then claiming it back. There is no facility for HMRC to refund VAT.

Which equipment and services can be bought without paying VAT?

Not all disability products are eligible for VAT relief. Certain goods and equipment that have been designed solely for use by sone one disabled can be bought VAT free (zero-rating). If some one is disabled, VAT may not need to be paid when buying the following items:

• building works:
• ramps, widening doorways and passages
• bathrooms, washrooms and lavatories
• lifts
• preparatory, restoration and making good
• goods supplied in connection with the construction
• emergency alarm call systems
• hydrotherapy pools
• incontinence products
• low vision aids
• medical and surgical appliances
• motor vehicles, wheelchairs, and boats designed or adapted solely for use by disabled people
• other equipment and appliances designed or adapted solely for use by disabled people
• parts and accessories
• repair and maintenance of goods
• specialist adjustable beds, chair lifts, hoists and sanitary devices
• specialist computer devices and equipment
• wheelchairs

VAT is not paid on the installation, repair and maintenance of these items, or on any spare parts and accessories needed for them.

This is not a complete list of eligible equipment.

VAT relief does not apply to general purpose goods used by disabled people.

Computer equipment

Computer equipment that’s been designed or adapted solely for use by disabled people can be bought without VAT. General use computer equipment including laptops, tablets and e-Readers can’t be bought VAT free even if they are sold with certain applications that may assist disabled people such as voice recognition. This is because the equipment hasn’t been designed solely for use by disabled people.

Apple products, such as the iPhone, iPad, iWatch and Mac computers do not qualify for VAT relief, as these products are not specifically for disabled people. There is no pre-installation of specialist software in addition to the standard Apple specification. Therefore, the standard rate of VAT applies to Apple products.

Items that are not exempt from VAT relief include lighting, monitors, ergonomic equipment and accessories.

Who can buy goods and services VAT-free?

For VAT purposes, you are disabled or have a long-term illness if:

• you have a physical or mental impairment that affects your ability to carry out everyday activities, for example sight loss.
• you have a condition that’s treated as chronic sickness, like diabetes
• you’re terminally ill

What HMRC mean by ‘designed solely for disabled people’

This means that the original intention of the product’s designer was to produce an appliance or equipment solely to meet the needs of people with one or more disabilities.

Goods that are designed for use by disabled and non-disabled people alike can not be bought VAT free. Goods that are bought to be used by or that are mainly bought by disabled people can’t be bought without VAT unless they’re designed solely for use by disabled people.

For example, general purpose equipment such as a laptop, an air conditioning device, a reclining chair or an orthopaedic bed might benefit a disabled person but can not be bought VAT free because they’re not designed solely for use by a disabled person.

What counts as personal or domestic use?

Personal or domestic use means that the goods or services are supplied for private use, rather than for business purposes.

Repairs, maintenance and adapting goods

There is no VAT on repairs or maintenance of eligible goods that were zero rated when bought.

Building work that can be VAT free

Certain building work to a disabled person’s home may also be VAT free. This includes:

• ramps, widening doorways and passages
• installing, extending or adapting a bathroom, shower room, washroom and lavatories
• lifts
• preparation or restoration work.

‘Home’ means the place where some one normally lives. This can be the home of a close relative if you normally live there. ‘Home’ includes the garden and any outbuildings.

Examples include:

• having a bath removed and replaced with a shower or walk-in bath or wet room if, because of a disability, you have difficulty getting in and out of a traditional bath
• having a bathroom installed on the ground floor if, because of a disability, you are not able to get upstairs
• altering an existing bathroom to allow wheelchair access around the room
• widening an existing doorway or widening an existing passage or room because of disability
• widening a path across your garden because of disability.

It does not include having a new bathroom installed or existing bathroom re-fitted, repaired or redecorated as a general home improvement.

It does not include having a completely new doorway, passage or room put in where there was not one before, replacing a window with a door or having a new path or vehicle driveway constructed.

There is no VAT on building materials bought which relate to certain building work that are eligible for relief.

Preparation, restoration work and making good

There is no VAT on any necessary preparation or restoration work if it is directly related to the VAT-free work described above.

For example, if you are having a bathroom adapted to install a walk-in shower or wet room, the replacement of other work essential to providing those facilities can be supplied VAT free. This may include installation of porcelain goods, the preparation of footings, including ground levelling, work linked to providing water, gas, electricity and drainage as necessary and the restoration of the immediate decor, including retiling.

Building materials and goods

Building materials that are used as part of the eligible work will also be VAT free if  a professional contractor (builder, plumber or other trade) does the work. VAT-registered contractors will pay VAT on the materials they buy and they can reclaim this VAT back from HMRC in the normal way. The building contractor’s supply of the materials to you will be VAT free.

Contractors who are not VAT registered can not reclaim the VAT on the materials they buy. Instead, they can help arrange for the materials to be supplied VAT free direct to from a VAT registered supplier.

If the work is done by a friend, neighbour or family member free of charge the materials can not be bought VAT free.

Building work that is not VAT free

VAT free building work for disabled people is limited to the work listed above. Any other work done, even if it is being done because of disability, can not be done VAT free.

Work that is not eligible for relief includes:

• the construction of a downstairs bedroom or adaptation of an existing room to form a bedroom
• the installation or upgrade of a domestic heating system, for example boilers and radiators
• replacement windows or doors
• the refitting of a kitchen
• extension or adaptation of the property to provide a bedroom, dining, living or utility rooms, conservatory, offices, kitchen or carer’s rooms.