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HMRC internal manual

VAT Clothing


In the 1940 Finance Act, relief from Purchase Tax was introduced for ‘Garments and footwear of a kind suitable for young children’s wear, but not including fur garments’. In announcing this, the Chancellor indicated that his intention was to provide relief on clothing for children up to the 12 to 14 age group. The Department has always sought to implement this by operating upon two principles:

  • that the upper limit for relief should be based upon children of an average size at their fourteenth birthday, as it is at this point that children’s body measurements become indistinguishable from those of a considerable number of adults;
  • that it is necessary to add the further criteria of style and ‘holding out for sale’ to prevent significant numbers of adults benefiting from the relief.

These principles were carried over from Purchase Tax to VAT, and are still in use today. However, with the move to VAT, the opportunity was taken to tighten the wording of the law, with the use of the phrase ‘and not suitable for older persons’. The scope for tax avoidance on clothing was also lessened by revision of the maximum measurements in line with the latest revision of the British Standard body measurements, and the tightening of the manufacturing and design tolerances.