Changes to Zero VAT for the disabled

HMRC Vat free goods for disabledHMRC, from 30th November 2012, have changed the way wheelchair users apply for VAT relief on purchasing a motor vehicle, this applies to both new and used vehicles.  Due to abuse of the system all adaptations to a Car, WAV or Van now need to be ‘permanent and substantial’ in order for the purchase to be rated VAT free.  It remains the case that parents of a disabled child (wheelchair user only) can also benefit from a VAT free purchase.

Two HMRC helpsheets are available to download that include a declaration to be signed by the customer and the supplier (click on link to open in a new window):

VAT1615 – Guidance for Customers

VAT1616 – Guidance for Suppliers


VAT (Vodka and Tonic) Free

Whatcar reported in 2007:

Radio 4’s ‘You and Yours’ consumer programme highlighted a practice where a small number of disabled drivers have been ordering high-specification cars such as Range Rovers, Maseratis, Porsches and Bentleys and then immediately selling them on to dealers for a profit of up to £12000 per car.
The dealers then sell the cars as pre-registered vehicles to people who want to jump the waiting lists for these exclusive cars.
At present, a vehicle only has to have small modifications to be eligible to be sold VAT-free.
Examples include fitting a small knob to the steering wheel to aid turning, which can be removed simply and without trace once the vehicle has been sold on.
Reports suggest they have identified an individual who has registered 60 Range Rovers in the past two years.


Vat Free mobility carGeneral Facts:

• You, or a passenger in the car need to be a wheelchair user, not a mobility scooter user.

• All modifications made to the Vehicle as well as the purchase cost are VAT free

• Second hand vehicles are more complicated as the supplier needs to remove them from their Second-Hand Margin Scheme in order for you to gain full zero rate VAT on your purchase.

• All servicing and repairs are VAT free while you are the owner of the vehicle.

Examples of eligible adaptations:

• A hoist to lift a wheelchair into or onto the vehicle

• A specialist wheelchair box, fitted to the top or back of the vehicle

• Adaptations that enable a wheelchair user to drive the vehicle, such as push/pull brake and accelerator, hand controls or other aids that operate the primary driving controls.

The following do not qualify as adaptations:

• The fitting of a standard roof rack or standard roof box

• The attachment of a trailer to the back of a vehicle

• The fitting of automatic transmission

• The fitting of parking/reversing sensors because they are for general use and not specifically designed for disabled people.


We hope these changes close the loophole exploited by these few greedy rogues, should anyone need further clarity on the criteria to take advantage of a VAT purchase, them please ask away: contact us.  We will help as far as our knowledge extends on the minefield that is VAT.