Supplies to handicapped people
We can only zero rate supplies to handicapped people when:
- the person is chronically sick or disabled
- the goods and services are purchased or acquired for their personal or domestic use
What does chronically sick or disabled mean?
A person is chronically sick or disabled if he/she is a person:
- with a physical or mental impairment which has a long-term and substantial adverse effect upon his/her ability to carry out everyday activities;
- with a condition which the medical profession treats as a chronic sickness, such as diabetes;
- who is terminally ill.
- It does not include a frail elderly person who is otherwise able-bodied or any person who is only temporarily disabled or incapacitated, such as with a broken limb.
If a parent, spouse or guardian acts on behalf of a chronically sick or disabled person, your supply is treated as being made to that chronically sick or disabled person.
The term disabled is used throughout this notice and means handicapped or disabled or chronically sick.
Supplies to charities
- We cannot zero rate all of the goods and services to all charities. We will then, therefore, take extra care in checking that a charity is eligible for VAT relief before zero-rating your supply.
- Supplies of goods to charities will qualify for VAT relief where the goods are made available by the charity to a disabled person for their personal or domestic use.
- There are certain other circumstances when supplies will qualify for VAT relief
What is a charity?
Bodies in England and Wales have charitable status when they are registered, excepted or exempted from registration with the Charity Commission, or bodies anywhere in the United Kingdom which are treated by the Inland Revenue as charitable. Not all non-profit making organisations are charities.
There is no distinction for VAT purposes between those charities registered with the Charity Commission and those that are not required to register. However, unregistered charities claiming zero-rating may need to demonstrate that they have charitable status. This may be achieved from their written constitution or by the recognition of their charitable status by the Inland Revenue.
Further information on VAT reliefs available for charities is contained in Notice 701/1 Charities.
Supplies to eligible bodies
Supplies purchased by certain healthcare bodies and hospitals with charitable funds may qualify to be zero-rated under separate rules. For more information see VAT Notice 701/6 Charity funded equipment for medical, veterinary etc uses.