LITRG call for review of VAT reliefs for disabled people

A comprehensive report by the Low Incomes Tax Reform Group (LITRG) is calling for HM Revenue & Customs (HMRC) to review the VAT reliefs given to disabled people.
The report also focuses on the need for better administration of the reliefs to make them easier to obtain, and a re-think on VAT that is payable on products not ‘solely designed’ for disabled people.

The report was prepared by the international VAT network of PricewaterhouseCoopers LLP and sponsored by the Nuffield Foundation. It maps how VAT reliefs work across selected European countries against the European Union’s goal of achieving a ‘society that is open and accessible to all’, and against the objectives of UK government policy to remove barriers restricting opportunity and choice for disabled people.

Robin Williamson, LITRG Technical Director, says: “Disabled people face substantial additional costs in their daily lives. LITRG applauds the government for zero-rating products ‘solely designed’ for disabled people. However, there are other products that are not solely designed for disabled people but which are nevertheless critical to overcoming disability. Not all of these have a reduced VAT rate but we believe they should.”

Robin Williamson explains: “A person with a muscular disease, for example, would get VAT relief on the purchase of a wheelchair, but not on an orthopaedic bed, which is equally necessary, because the latter was not "designed solely" for use by disabled people. Similarly, someone with a visual impairment would be able to buy a talking mobile phone VAT-free, but not a big-button phone for home use. These anomalies should be removed to avoid VAT becoming an additional burden on disabled people.”

The report also looks at how difficult it is for disabled people to get information about VAT reliefs and then obtain those reliefs. There are a number of obstacles at present and the report calls for these to be removed or redesigned so that the whole process is made far easier.

Patrick Walker, UK head of indirect tax at PricewaterhouseCoopers LLP, says: “Although on paper UK legislation may seem to allow a wider scope for VAT relief than in many other EU states, there are obvious areas where VAT relief could be extended in line with the EU Directives. In addition, administration of the system is difficult and there are inconsistencies to be resolved. This is important if we are to prevent VAT being an additional and unnecessary burden to disabled people.”