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Kelly Sizer of the Low Incomes Tax Reform Group outlines some special VAT reliefs for people who are disabled or over 60.

Claim it or lose it!

VAT (‘Value Added Tax’) is charged at the standard rate (usually 17.5% but reduced to 15% until 31 December 2009) on sales or other supplies of most goods and services.
 
Some items - such as most foods bought in groceries - do not have VAT charged on them; so everyone who buys food automatically benefits. Certain goods and services can sometimes be bought cheaper, for example if you are 60 or over or have a disability, because there are special VAT discounts available. But in order to benefit from a reduction in VAT (and therefore the cost) of some goods you have to prove that you are entitled to receive it.
 
An outline is given below of the help that disabled people and those aged 60 and over can receive.

Disabled people

Disabled people generally can obtain the following free of VAT:

• Cars – The purchase or lease of an adapted vehicle, or the cost of making adaptations.

• Alterations to your home – Some adaptations and building work to meet the needs of your disability (for example widening of doorways).

• Other equipment – A range of goods if they are specially designed to help with a disability. 

But watch out for the ‘small print’!  HMRC’s VAT Notice 701/7 gives more information on who can qualify and what purchases fall within the relief, but more straightforward information is to be found on Directgov.

People of 60 or over

Certain products that increase mobility can be supplied and installed together into a home occupied by someone of age 60 or over at a reduced rate of 5%:

• grab rails
• ramps
• stair lifts
• bath lifts
• built-in shower seats or showers containing built-in shower seats
• walk-in baths with sealable doors

When paying for the installation of any of the items, make sure you ask your supplier to apply the reduced rate of VAT if you are eligible.  Note that the relief is only available where the items are supplied and installed together – you cannot purchase the items separately at the reduced rate and install them yourself.  More information is given in HMRC Brief 47/07. But don’t forget that if you are 60 or over and are ‘disabled’ for the purposes of VAT (see links to further guidance above for details of who qualifies as ‘disabled’ in this context) you can claim to pay no VAT at all under the rules mentioned earlier.

A reduced rate is also applicable to certain grant-funded installations of heating or security equipment and the connection of a gas supply. This is a wider entitlement and applies not only to people of a certain age or who have a disability but also to persons in receipt of certain benefits such as council tax benefit. It is quite likely that reputable installers will be aware of the reduced rate and will check with you that you are entitled to it.

However, it is perhaps worth remembering that some people who carry out work may not be registered for VAT and will not charge VAT, whether at the standard or any other rate.

If you want to read more about the problems and inconsistencies in the VAT regime for disabled people do read LITRG’s report from January 2007 (before the age-related relief was introduced).