Find out which supplies of children’s clothing or footwear are zero-rated for VAT.
This notice cancels and replaces Notice 714 (July 2017).
1.1 This notice
This notice explains when supplies of children’s clothing and footwear can be zero-rated.
1.2 The changes
Paragraph 4.2.1 has been changed to clarify that both bullet points need to be met for zero rate to apply where measurements are exceeded.
1.3 Who should read this notice
It’s intended for those who design, manufacture and sell, either as wholesaler or retailer, items of children’s clothing.
1.4 The conditions for zero rating
You may zero rate your supply when all of the following 4 conditions are met, it must:
- be an article of clothing or footwear
- not be made of fur
- be designed for young children
- only be suitable for young children
1.5 How to decide whether all the conditions are met
The best way is to consider them one at a time as follows:
|Step||Ask yourself||This section will help you decide|
|1||Is it an article of clothing or footwear?||Section 2|
|2||Is it made of fur?||Section 3|
|3||Is it designed for young children?||Section 4|
|4||Is it suitable only for young children?||Section 5|
2. Articles of clothing or footwear
2.1 Decide if it’s an article of clothing or footwear
First determine if it’s an article of clothing or footwear, if it is not, it’s standard-rated. If, having read the following section, you’re satisfied that the item is an article of clothing or footwear you must also consider the other conditions in paragraph 1.4.
2.2 Articles of clothing
As well as all the obvious garments, ‘articles of clothing’ includes items such as hats, caps, braces, belts, garters and scarves. It also includes items that, although primarily designed as safety aids, such as cyclists tabards or sailors life jackets, still have the form and function of clothing.
‘Articles of clothing’ does not include clothing accessories and items of haberdashery sold separately, or safety accessories which are not themselves clothing, such as:
- reflective arm bands or buoyancy aids
- fastenings such as buckles, buttons and zips
- badges, patches and other sew-on or iron-on items
- hand muffs and ear muffs
See paragraph 4.5 for more information.
2.2.1 Baby clothing
Most items of baby wear, such as bonnets, bootees and matinee jackets, can be clearly recognised as clothing, but the following less obvious items are also considered to be ‘articles of clothing’:
- bibs, including plastic bibs with a curved tray at the base
- hooded rain covers for pushchairs, provided they’re suitable for the baby to wear as a rain cape when out of the pushchair
- nappies (and nappy liners), both disposable and reusable, provided they’re held out for sale to be used only for babies and young children
- babies’ shawls, provided they’re designed and held out as such
- padded sleeping garments, similar in construction to sleeping bags, but shaped at the neck and armholes or having sleeves or legs
- towelling bathrobes designed with a hood or sleeves enabling the baby to be wrapped in them as a garment
However, the following are not considered to be clothing and are standard-rated:
- pram and pushchair covers not designed to serve as rain capes outside the pram or chair
- disposable nappy material sold in a continuous roll from which individual nappies are cut
- ‘mother-and-baby’ shawls intended to wrap around both mother and child
- sleeping bags not designed with neck holes, arm holes, sleeves or legs
2.3 Articles of footwear
Articles of footwear include:
- boots, shoes, sandals and slippers, even if they’re designed for special purposes (such as ballet shoes or studded football boots)
- ice-skating or roller-skating boots, with or without skating blades or rollers attached
Articles of footwear not included are:
- blades or rollers sold on their own, or platform type roller skates for attaching to normal shoes
- shoelaces, insoles, heel protectors and stick-on soles sold as separate items
3. Items made of fur
3.1 Made of fur
You must standard rate any articles made wholly or partly of fur skin - that is any skin with fur, hair or wool attached.
Subject to the other condition at paragraph 1.4 the following items may be zero-rated:
- articles made using artificial fur
- clothing made of rabbit, sheep or lamb skin
- articles made from the skin, if neither tanned nor dressed, of bovine cattle (including buffalo), equine animals, goats or kids (other than Yemen, Mongolian and Tibetan), swine (including peccary), chamois, gazelles, deer or dogs
- fur and fur-lined headgear, belts, gloves and footwear
- articles only trimmed with fur - unless the area of the trim is more than one fifth of the surface area or, if the garment is new, the cost to the manufacturer of the trimming is more than the cost of the material
- fur lined boots
4. Items designed for young children
4.1 Designed for young children
After you have decided that the item is an article of clothing or footwear, and that it is not made of fur, you must then decide whether or not the item is designed for young children. This will normally be done either on the basis of the item’s physical measurement or on the body size of the child it’s intended to fit. But remember, before the garments can be zero-rated you must also satisfy the other conditions in paragraph 1.4.
HMRC will accept that garments are designed for young children provided they are at or within the tabled measurements. These measurements are based on children up to the eve of their 14th birthday, as this is when the body dimensions begin to merge with those of the general adult population.
The garments should be measured on a flat surface, with creases smoothed out, buttons (or equivalent) fastened and any intended overlap in place. Chest measurements should normally be taken 2.5 centimetres (1 inch) below the base of the armhole and multiplied by 2. Similarly, waist measurements should be taken from one side of the fastened waistband to the other and multiplied by 2.
|Garment||Chest centimetres (cm)||Chest inches (“)||Waist centimetres||Waist inches|
|Top coats, outerwear||114cm||44.5”|
|Dresses||not applicable||not applicable|
|Skirts*||not applicable||not applicable|
|Underwear, swimwear||88cm||34.5”||72 cm||28.5”|
|Garment||Chest centimetres (cm)||Chest inches (“)||Waist centimetres||Waist inches|
|Top coats, outerwear||115cm||45.0”|
*Those garments with elasticated waistbands should be measured at their full stretch. Those that have no fastening may be zero-rated up to a maximum stretched waist of 85cm (33.5”) for boys and 90cm (35.5”) for girls.
Some products are normally judged by different criteria or measurements. The following garments are also accepted as being designed for young children.
|Garment||Criteria or measurements|
|Lifejackets||Maximum body weight 52kgs (114lbs)|
|Teen bras||Size 34B|
|Leotards, body stockings, full body swimsuits||Shoulder to crotch 70cm (27.5”)|
|Saris||422cm × 104cm (166.0” × 41.5”)|
|Lungis||156cm × 94cm (61.5” × 37.0”)|
|Lightweight 51cm (20.0”)||Heavyweight 56cm (22.0”)|
|Socks||Boys - shoe size 6½ girls or unisex - shoe size 5½|
4.2.1 Larger sizes
If the measurements are exceeded, the garments may still be accepted as designed for young children if you can satisfy HMRC that they’re both:
- designed to fit a body size no larger than those in paragraph 4.2.2
- restricted by some other design feature to those under 14 years of age
You will need to show HMRC that the body sizes you have used are appropriate to children under 14 and that the garments produced are only suitable for that age group. You must provide full specifications and reasoning in order to obtain HMRC’s written agreement prior to zero rating supplies.
4.2.2 Body measurements
If you can show that you have designed a garment for a person under 14 and the body measurements used are at, or below, those in this table, you may zero rate the resulting garment irrespective of its measurement, as long as it is only suitable for young children - see section 5.
|Body part measured||Boys centimetres||Boys inches||Girls centimetres||Girls inches|
|Arm (shoulder to wrist)||59cm||23.0”||57cm||22.5”|
4.2.3 One-size and stretch garments
You cannot zero rate articles of clothing which are sold in one size only and that are suitable for both children and adults. Articles that stretch to fit, such as some sportswear, can be zero-rated provided the garment is designed to fit a body size in accordance with paragraph 4.2.2.
HMRC will accept that footwear is designed for young people when the following measurements are met:
- boys shoes - up to and including size 6½
- girls court shoes (that is a low cut shoe without straps or other fastenings) - up to (and including) size 3
- other girls shoes - up to (and including) size 3, and sizes 3½ to 5½ as long as the heel height does not exceed the sole depth by more than 4cm (approx 1⅔ inches)
4.3.1 American and continental sizing equivalents
|Boys 6½||7 (unless 7½ is marked as equal to UK 6½)||40|
|Girls 3||4½||35½ (35 if no half sizes)|
|Girls 5½||7||38½ (38 if no half sizes)|
4.3.2 Larger sizes
If you can show us that your products are designed exclusively for the under 14s and that they’re held out for sale to this age group - see section 5.
4.3.3 Unisex footwear
Most lines of footwear are designed for one sex or the other, either in overall construction or by the choice of colour and trim. You should zero rate such footwear according to the rules relating to girls’ or boys’ footwear as appropriate.
True ‘unisex’ footwear is as suitable for girls as it is for boys and can only be zero-rated up to and including size 5½, the maximum size for girls footwear.
4.3.4 Feet of differing sizes
Where a child has one foot significantly larger than the other or requires an unusually high heel for one foot, the pair of shoes can be zero-rated if the smaller shoe qualifies for the relief.
4.4 Hats and other headgear
Young children have proportionately larger heads than older persons and many children’s hats will fit adults. However, you can still zero rate hats (including caps and other items of headgear) which are suitable by design only for young children, for example babies’ bonnets, school hats, or if they’re clearly held out for sale for young children.
The following items have been accepted as falling within the relief:
- protective helmets (such as those for skateboarding or ice hockey) up to a maximum size of 59cm as long as they’re designed and marketed exclusively for children - see section 5
- riding hats up to and including 6¾ (jockey skulls up to size 1) even if they are not held out for sale for children
If you sell larger riding hats specifically for young children, you can zero rate them as long as they’re fitted, adapted or otherwise appropriate only for young children. For example, the range of riding hats for young children may be less sophisticated (in terms of design and appearance) than the adult range in the same sizes. If you think that the riding hats are eligible for the zero rate, you must check with us first and get our written approval before zero rating them.
All cycle helmets are zero-rated irrespective of size or how they’re held out for sale.
4.4.2 Other headgear
Some articles worn on the head cannot be zero-rated even though they’re for young children because they’re accessories rather than clothing. This includes all articles that do not cover the whole head such as:
- alice bands
- hair ribbons and slides
- sports and other headbands
- sun visors and ear muffs
Novelty hats, party hats and play hats made out of materials such as paper or plastic are not clothing but toys, and are standard-rated.
4.5 Belts, braces and other items
HMRC accepts belts, braces, neckties, gloves, garters, scarves, ruffs, collars and shirt frills as traditional items of clothing and they may be zero-rated irrespective of size as long as they’re held out for sale for the under 14s only - see section 5.
5. Items suitable only for young children
5.1 Show that items are suitable only for young children
This is the final step in deciding whether or not you can apply the zero rate to your product. You must have addressed the previous conditions detailed in paragraph 1.4.
The final test that must be satisfied is that the articles must not be suitable for older persons. This can be met by ensuring that they’re ‘held out for sale’ for young children, which is your statement that the items are suitable only for young children and therefore unsuitable for older people.
5.2 The meaning of ‘held out for sale’
This is the way in which the article is labelled, packaged, displayed, invoiced or advertised. It includes any promotional items and the heading under which an article is listed in a catalogue, webpage or price list.
You cannot necessarily zero rate goods you sell simply because they were zero-rated when you bought them. How they’re held out for sale will affect their liability.
Goods, which may qualify at the design stage, will fail the suitability test if they’re labelled to fit sizes larger than those in the body measurements table in paragraph 4.2.2.
5.3 Zero rating by manufacturers
You must be able to show us that items qualify for zero rating from product specification or other documentation. You must identify them appropriately on any labelling and packaging, and in any promotional material and on invoices.
5.4 Zero rating by wholesalers and distributors
You must clearly identify the article as being only suitable for children on invoices and price lists. If the goods are on display they must clearly be identified and segregated. If you provide a catalogue, it must identify the articles as being for children, preferably in a separate children’s section. The identical product must not appear in both adult and children’s sections.
5.5 Zero rating by mail order and internet suppliers
You must clearly identify the goods as being for young children in any price list, page, catalogue or other promotional material, preferably using a discrete children’s section. The potential purchaser should be in no doubt that the goods they’re looking at are for young children. Identical goods must not appear in both adult and children’s sections.
5.6 Zero rating by retailers
You can zero rate clothing for young children only if it’s clear from labels, signs, packaging, advertising that it’s intended for young children and you either:
- sell it from a shop, a separate department in a shop, or a separate section of a catalogue which caters exclusively for children
- keep it apart from adult garments by selling it from separate shelves, racks which are clearly marked up as ‘boys’, ‘girls’ or ‘children’s’
The extent to which you’re able to isolate and identify young children’s clothing will vary depending upon the size and type of retail outlet you have. However, you should be able to show HMRC that you have as good a system as is practical in your circumstances. The potential purchaser should not be left in any doubt that you’re selling items for young children.
5.7 Impact on retail scheme calculations
Because the way you hold goods out for sale may affect their VAT liability, you’ll need to consider the operation of your retail scheme.
The paragraph on goods bought at one rate but sold at another in VAT Notice 727/4 retail schemes: how to work the apportionment scheme and VAT Notice 727/5 retail schemes: how to work the Direct Calculation schemes provides the essential information on this topic.
6.1 Uniforms for school and children’s organisations
There is no specific relief for items of school uniform, they’re subject to the normal rules for children’s clothes.
However, if you supply garments under a specific agreement with a school which is exclusively for pupils under 14 years of age you may be able to apply the zero rate beyond the garment measurements in paragraph 4.2.
The garments must be unique to that school by design, such as a prominent badge or piping in school colours, and held out for sale as being for that school only. If these conditions are met, you may apply the zero rate irrespective of garment size.
The same principles apply to clothing items which form the uniform of other children’s organisations catering exclusively for the under 14s, such as Beavers and Brownies.
These may be zero-rated irrespective of size provided they’re:
- designed exclusively for the organisation
- worn only by under 14s
Zero rating does not apply to items which may also be worn by older groups such as Scouts.
7. Cloth kits
7.1 Zero rating packaged kits for making children’s clothes
You can zero rate the packaged kits, but only if:
- the clothes themselves would be zero-rated
- the material is already cut to the pattern or the pattern is indelibly printed on the material
- it’s clear from the labelling or other promotional material that the made up garment is only suitable for young children
8. Single or multiple supplies
8.1 How to decide the correct treatment
If you sell play outfits consisting of both zero-rated clothing and incidental standard-rated items at an inclusive price (such as a cowboy suit with a toy gun or a policeman’s uniform with toy handcuffs), the supply is seen as a single supply of children’s clothing. This is because the gun or handcuffs are considered to be incidental to the main supply of the clothing you may zero rate the whole sale.
Where the standard-rated element is not incidental, such as a babies gift set comprising of a bib and feeding cup, you will need to consider the liability of the supply in relation to the guidance in the VAT supply and consideration Manual and section 8 on multiple and single supplies in VAT guide (Notice 700).
9.1 Cut, make and trim
You can zero rate the process of making young children’s clothing from cloth owned by someone else. Other processes may also be eligible for zero rating if, after the work is finished, the processed article clearly becomes a child’s garment which itself is normally zero-rated or the processed goods can only be incorporated in such an item.
9.2 Alteration, repair, embroidery and similar services
These services do not qualify for the relief as they’re applied to goods that maintain their essential nature. For example, a blazer that has its sleeve length altered, its collar repaired, or a school badge embroidered on its pocket, is not sufficiently changed by that process to produce a new item.
However, if the blazer were changed into a waistcoat by the process, the service would have produced a new item. If this waistcoat meets the criteria for zero rating then the process would also be zero-rated.
9.3 Hire or loan of children’s clothing and footwear
You can zero rate the hire or loan of any item that would itself be zero-rated. This includes items such as bridesmaids and page boys outfits, fancy dress costumes and nappy hire services where the nappies are collected for laundering and replaced with fresh ones.
The separate supply of ice-skates, roller skates, ten-pin bowling shoes, is also eligible for the relief in accordance with the size criteria for footwear in paragraph 4.3. However, if you charge a single price for admission that also includes the loan of footwear, you must consider your supply in relation to the guidance on single and multiple supplies in the VAT supply and consideration Manual and in VAT guide (Notice 700).
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