“Am I eligible for zero VAT on my purchase?” is a question we often get asked here at Felgains. It’s often a confusing process with complicated rules, so let’s break it down…
First of all: What is VAT relief?
Exemption from VAT – often known as ‘eligible for VAT relief’ or ‘zero-rated’ – allows people with disabilities to buy equipment at 0% VAT, meaning they can save money on what are sometimes expensive purchases. People who are eligible do not have to pay VAT on goods they buy that are only for people with disabilities, or adapted specifically for people with disabilities. However, not all items automatically apply for 0% VAT.
The relevant VAT Notice
The VAT notice that applies is 701/31: Health and Care Institutions. This states that goods supplied to people with disabilities qualify for zero VAT where all of the following conditions are met;
- The relevant conditions in VAT Notice 701/7: VAT reliefs for disabled and older people are met;
- The goods are provided for the domestic or personal use of the customer;
- The goods are not provided, ordered or paid for by a hospital, nursing home or other qualifying institution;
- The goods are not integral to care or treatment provided in a hospital, nursing home or other qualifying institution.
Who qualifies as a person with disabilities?
For the consideration of VAT, you are a person with disabilities 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 blindness
- you have a condition that is treated as chronic sickness, like diabetes
- you are terminally ill
You do not qualify if you’re elderly but able-bodied, or if you are temporarily disabled.
What qualifies as ‘Domestic or Personal Use’?
VAT Notice 701/7: VAT reliefs for disabled and older people states that ‘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 are 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 stairlift installed in a charity building and made available for the general use or convenience of all those chronically sick or with disabilities who might need it, rather than for the personal use of specified individuals;
- Goods and services supplied to;
- An in-patient 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 in-patient 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
Once VAT relief eligibility is determined, how do I claim it?
Once Felgains have determined that a purchase is eligible for VAT relief, the customer will need to provide a written declaration. HMRC does not provide an exemption certificate, but the team at Felgains have created a simple form you can download, fill in, and send to us. This declaration will be stored in our files once the order is placed.
For the VAT relief form for Charities, click here.
For the VAT relief form for Disabled Persons, click here.
Please send your completed form to firstname.lastname@example.org
Once zero-rating is applied, Felgains will not charge the customer VAT – the goods will be invoiced with 0% VAT applied. VAT is not refundable after purchase, so it is important that you apply for this when you first enquire.