That said, whilst there is no blanket or indeed automatic VAT reduction, relief is available as a two stage process:
- the right type of ‘user’, and
- the right type of ‘works’
VAT relief is applied at it’s widest when supplied to a disabled individual (for example churches and day centres qualify less for relief than say an individual in their own home). Once eligibility is proven – like most other forms of VAT relief – it is then necessary to determine to what extent it applies.
The type of expenditure qualifying for the zero rate of VAT is:
- Supply & Fit of specialist equipment. This must be ‘designed for’ or ‘adapted for’ use by the disabled – and not just items used by or for a disabled person.
- Building Works. A very limited and specific list:
• Formation of disabled washrooms & bathrooms
• Widening of (existing) doors and passages
• Formation of ramps & lifts
Therefore, whilst many schemes we see are wholly for the benefit of a disabled person or intended to form a ‘house for life’, it is rare that the VAT savings reflect this; especially poignant where carer suites and sensory bedrooms / playrooms are needed (works that are ineligible for VAT relief).
In the same vein, churches and charities often presume that they benefit from VAT relief on adaptations for disabled members of the community, unaware that the tests for lifts and level threshold are rarely met in public buildings.
Our Consultants are well versed in the nuances of what constitutes ‘eligible’ adaptations, and of more value, how relief can be extended to preparatory and restitution works. Particularly for the latter, it is important that any application to HMRC for discretionary relief is based on cold clinical VAT facts, substantiated with past case precedents wherever possible, and not on a ‘common sense & logic’ basis (approaches that are rarely applicable to the world of VAT….)