HMRC offer a number of VAT exemptions for people with a disability, chronic illness or a terminal illness. The VAT exemptions apply to many daily livings aids including mobility scooters, rise recline chairs and adjustable beds, as well as building works, like ramps, door widening and installing a walk-in bath or shower.
Many people eligible for VAT exemptions have encountered them when purchasing an item like a mobility scooter. Understandably, the exemption makes the item that little more affordable and the savings can add up as more mobility aids are purchased.
VAT exemption for minor building works
Minor building works, including the bathroom, are always big ticket items with the costs going into the thousands of pounds. If you are eligible for VAT exemption and are considering this type of work, it’s a very good idea to ensure you seek quotations from firms that are registered with HMRC’s VAT exemption scheme.
The exemption applies at point of sale, so the price you pay is free from VAT. Firms unfamiliar with the scheme may charge you VAT and suggest you claim it back from the Taxman at a later date. That is not how the exemptions work and you should avoid a firm operating like this as you will lose out financially.
Who is eligible for VAT exemption?
The VAT exemptions apply to people who are “chronically sick or disabled” and HMRC offer two definitions of what this means:
“A physical or mental impairment which has a long term and substantial adverse effect upon your ability to carry out everyday activities.”
“A condition which the medical profession treats as a chronic sickness (that’s a long term health condition).”
This does not extend to people experiencing temporary disability or incapacitation due to a fractured limb or short term illness for example. Nor does it apply to someone who is elderly but is not chronically sick or disabled.
The exemption scheme is self certified; meaning the person using the exemption is responsible for ensuring they are eligible.
HMRC and your chosen supplier cannot tell you if you are exempt, but it should be clear from a reading of the exemptions if it applies to you. Anyone in any doubt should consult their doctor or medical adviser as HMRC impose penalties for any misrepresentations.
What do I need to do to claim exemption?
If you are eligible and wish to place an order for minor building works, such as a walk-in bath or easy access shower, your chosen supplier can provide you with a VAT Exemption Form, which will be laid out in a format acceptable to HMRC.
You then complete your details and confirm the full medical name for the disability or chronic illness. It is not acceptable to HMRC to write “difficulty getting upstairs”. They will require the medical disability or chronic illness causing this to be clearly stated on the form.
Once in receipt of the completed form and any other required items, such as signed order forms and deposits, your chosen supplier will be able to progress your order and begin the works.
The VAT Exemptions are relatively straight forward to understand and should present no problems. However, when first encountered they can seem a little daunting and everyone wants to ensure they are doing things correctly.
For more advice on VAT exemptions in relation to building works including walk-in baths and showers, see HMRC’s web site https://www.gov.uk/financial-help-disabled
Or try this HMRC pdf file:11 November,2016