In this section:

VAT if you construct, adapt or install for disabled people

Building and construction work is usually VAT standard-rated but some alterations you make to a disabled person's home may qualify for zero-rating, which means that you do not charge VAT to your customer. There are also certain goods that can be zero-rated if you supply them to a disabled person.

There are certain conditions that have to apply for goods and services to qualify for zero-rating. It's important that you get written declarations from your customers confirming that they're eligible for the VAT relief. It's your responsibility to make sure that all the conditions for zero-rating apply before you zero-rate your supply.

This guide explains the goods and services that are eligible for VAT relief when they're supplied to a disabled person. It also gives a definition of who HM Revenue & Customs (HMRC) considers to be a disabled person for the purposes of the VAT relief, as well as sample customer declarations.

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Alterations to a disabled person's home

Some alterations you make to a disabled person's private home can be VAT zero-rated. These are shown below.

If you’re doing this work as part of building a new home, it may qualify for zero-rating anyway.

Find out when you can zero-rate building a house or flat

Ramps, doorways and passageways

As long as the work you do is to help a disabled person go in and out of their home or move around inside it, you can zero-rate:

  • building a ramp
  • widening a doorway or passageway - but not building a new doorway or passage

Building a ramp includes:

  • raising a floor level to match an existing floor so that steps can be removed
  • reducing the angle of a slope
  • creating a slope

Widening doorways and passageways includes:

  • widening a room that a disabled person goes through to get to another room - for example a bedroom with an en-suite bathroom
  • widening an existing path across a disabled person's garden - but not building a new path

In this case the person's private home includes the garden, yard, outbuildings, detached garages and even an orchard.

Bathrooms, washrooms and lavatories

You can zero-rate the work if you install, extend or adapt a disabled person's bathroom, washroom or lavatory. But the work must be necessary to suit the disabled person's condition.

For the purposes of this relief, the following definitions apply:

  • a bathroom includes a shower room
  • a washroom means a room that has a toilet or a washbasin (or both) but doesn't have a bath or a shower, or any cooking, sleeping or laundry facilities
  • a lavatory is a room with a toilet and maybe a washbasin

In this case the person's private home includes any outbuildings as well.

When you install, extend or adapt a bathroom, washroom or lavatory and build additional accommodation (such as a bedroom or kitchen) at the same time, the additional accommodation is standard-rated. So you'll have to apportion your work between the parts that are zero-rated and those that are standard-rated.

Lifts

You can zero-rate all the essential work you do when you install, repair or maintain an ordinary vertical lift in a disabled person's home. The lift must be designed to help the disabled person move between the floors of their home.

You can also zero-rate the supply and installation in a disabled person’s home of a stair lift, or chair lift that is designed for use in connection with a wheelchair. See the paragraph on ‘Supply or installation of goods for the personal or domestic use of a disabled person’ below.

Goods supplied in connection with construction services

You might also supply goods - like building materials - when you provide the construction services detailed above. You can zero-rate these goods as long as the construction services themselves qualify for the zero-rating.

Preparatory or restoration work and making good

When you provide any of the construction services detailed above, you might have to do some preparation work, or some restoration or making good may be needed. You can also zero-rate this work.

Additional work

When you carry out the main construction work in a disabled person's home, you may have to use an area that was previously part of another room. If you restore the room to its original size, you can zero-rate the work involved.

Work supplied to a charity

You may also be able to zero-rate some of the building work listed above when you supply it to a charity.

More about zero-rating building work for a charity in Section 6 of VAT Notice 701/7

Work done for local authorities

When the building work listed above is carried out to a disabled person’s residence but is done for and paid by a local authority, it does not qualify for zero-rating even though it’s for the benefit of the disabled person. However, a local authority might pay a disabled person a grant towards the cost of adaptations to their private residence. The grant might be paid to the individual or the local authority might sometimes pay it directly to the building contractor on behalf of the individual. In such cases, ie where your supply is actually being made to the disabled individual, the work will qualify for zero-rating providing the usual conditions are met.

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Supply or installation of goods for the personal or domestic use of a disabled person

There are some goods that you might provide to disabled customers that can be zero-rated when you:

  • supply them, whether or not you install them
  • install them, as long as they're not paid for or arranged by the NHS or any other hospital or nursing home
  • repair and maintain them
  • adapt them to suit a disabled person's condition

To be able to zero-rate them all of the following must apply:

  • the customer must be eligible for VAT relief
  • the goods must qualify for zero-rating
  • the goods must be for the customer's 'personal' or 'domestic' use

Goods that qualify for zero-rating

There are certain goods designed for disabled people that can qualify for zero-rating subject to certain conditions. You might supply or install some of these in the course of your work. Details of the goods that qualify are shown in section 2.4 of Notice 701/7, 'VAT reliefs for disabled people'. They include:

  • adjustable beds
  • hoists
  • chair and stair lifts
  • sanitary devices
  • alarms
  • parts and accessories designed only to be used with goods that qualify for zero-rating
  • other equipment or appliances designed solely for use by a disabled person

Find out which goods for disabled people qualify for zero-rating in VAT Notice 701/7

Personal or domestic use

You can only zero-rate your supply of goods if they're for the disabled person's personal or domestic use. Personal or domestic use means that the goods are supplied to be used only by the individual disabled person (or a series of identifiable disabled individuals). It doesn't include:

  • business use
  • supplies that are made available for a group of people to use - for example, a stair lift installed in a public building that can be used by any disabled person who visits the building

Personal or domestic use doesn't include goods and services for use in the care or treatment provided in a hospital or nursing home, when they're supplied to:

  • in-patients, out-patients and hospital or nursing home residents
  • any other person or commercial establishment where the goods will be used by, or in connection with an in-patient, out-patient or resident of a nursing home or hospital

Charities

You may be able to zero-rate certain supplies you make to a charity that makes the goods available to a disabled person, as long as they're for the disabled person's personal or domestic use.

More about supplies to charities in Notice 701/7

Adapting goods

You can zero-rate the work you do when you adapt general-purpose goods so they suit a disabled person's condition, as long as you're supplying them to either of these:

  • a disabled person
  • a charity that makes the goods available to a disabled person

Any materials you have to use when you adapt the goods can also be zero-rated. But the general purpose goods themselves are standard-rated. So if you supply the general purpose goods yourself and adapt them before supplying them to a disabled person, you'll need to apportion the value of your supply between:

  • the cost of the unadapted standard-rated goods
  • the cost of adapting them, which is zero-rated

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What is meant by a ‘disabled’ person?

A person will qualify for the disabled persons’ VAT reliefs if he or she has any of these conditions:

  • a physical or mental impairment that has a considerable and long term effect on their ability to carry out everyday activities
  • a condition that the medical profession treats as a chronic sickness like diabetes
  • a terminal illness

But not if they have conditions like these:

  • they are frail and elderly but not disabled as described above
  • they are only temporarily disabled or incapacitated, for example with a broken limb

There is a different VAT relief available on certain supplies for elderly people, which means they can buy certain things at the reduced rate of VAT (5 per cent). See the paragraph below on ‘Work that can be reduced-rated’.

HMRC cannot offer specific advice on whether or not any particular individual customer is disabled. HMRC recommends that you ask for a written declaration from each disabled customer confirming that they are disabled, as described above, and are entitled to the VAT relief.

Remember that a customer’s declaration that they are disabled is - on its own - not enough to zero-rate your supply. All the other conditions described in VAT Notice 701/7 for each of the various reliefs must be met too.

More about what HMRC defines as disabled in VAT Notice 701/7

If your work is zero-rated

If the work you do for a disabled customer qualifies for zero-rating, you shouldn’t charge the customer any VAT. Your invoice should show a VAT total of £0.00, at 0 per cent, for the work that qualifies. If you include other work or goods on the same invoice then you should show the amount of VAT due on those supplies at the relevant rate.

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What evidence you must keep for zero rating

As a supplier it’s your responsibility to make sure you account for the right amount of VAT on your sales. To zero-rate a supply the goods or services must qualify for zero-rating and you must be satisfied that your customer is eligible. If you zero-rate a supply you should be able to demonstrate from your records that it was properly zero-rated.

HMRC recommends that you get a written declaration from each disabled customer to show that they're entitled to VAT relief. This certificate should be retained with your records for examination in case you have a VAT visit.

A declaration should:

  • contain enough information to show that your customer qualifies for the relief
  • be separate - or clearly different from - any order form or invoice for the goods or services

When a customer is unable to make a written declaration

It may not always be possible for a disabled person to sign a declaration. For example the person may be a child, or unable to write.

If they're not able to sign a declaration, HMRC will accept the signature of the person's parent, guardian, doctor or another responsible person.

Electronic declarations

You can accept electronic customer declarations, for example by email or fax. With some electronic declarations it's not possible for the customer to sign their name. So it's important you keep some evidence of where the document came from, like the original email message that shows the sender's address.

Like a paper declaration, it should be clear that an electronic declaration isn't an order form or invoice.

False declarations

If you think a customer declaration is inaccurate or false, you mustn't zero-rate your supply. You should also be careful that your procedures, forms and literature don't encourage or lead customers to make false declarations. There are penalties for making and accepting false declarations and for fraudulent VAT evasion.

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Sample of customer eligibility declaration

A sample eligibility declaration for your disabled customers to complete is shown below.

Eligibility declaration

Please note that there are penalties for making false declarations

If you're in any doubt about your eligibility to receive goods or services that are zero-rated for VAT you should read Notice 701/7, 'VAT reliefs for disabled people'.

I (full name) ..............................................................................
of (address) ..............................................................................
..................................................................................................

declare that:

  • I am chronically sick or have a disabling condition by reason of: (give full and specific description of your condition)
  • I am receiving from: (name and address of supplier)
    * the following goods which are being supplied to me for domestic or my personal use:
    (description of goods)
    * the following services to adapt goods to suit my condition:
    (description of services and goods)
    * the following services of installation, repair or maintenance of goods:
    (description of services and goods)
    * the following alterations to my private residence:
    (description of alteration)
    * the services of monitoring a personal alarm call system

and I claim relief from VAT.

................................................................................ (Signature)
........................................................................................ (Date)

To be completed by Supplier

I (full name) ..................................................................................
of (address) ..................................................................................
......................................................................................................

am supplying to the person named above:


* the following goods:
(description of goods)
* the following services of adapting goods:
(description of services and goods)
* the following services of installation, repair or maintenance of goods:
(description of services and goods)
* the following alterations to a private residence:
(description of alteration)
* the services of monitoring a personal alarm call system
for the personal use of the disabled person.

................................................................................ (Signature)
........................................................................................ (Date)

*Delete words that aren't applicable'

View a sample eligibility declaration by a charity in VAT Notice 701/7

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Work that can be reduced-rated

As well as zero-rating work for disabled customers, you can also charge a reduced rate of 5 per cent for certain other work you do. This includes supplying and installing:

  • some mobility aids for the elderly
  • certain heating systems and security goods that are funded by a grant

Find out more about reliefs on mobility aids, central heating systems and security goods

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