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HMRC internal manual

VAT Clothing

History of changes to HMRC policy

The principles underpinning the zero rating of children’s clothing and footwear outlined in VCLOTHING1100 were carried over from Purchase Tax, and since the introduction of VAT there has been little change in either the relevant law or its interpretation. A number of reviews have been undertaken which have confirmed the appropriateness of current policy and ensured that it reflects changing sizes. Key reviews are as follows.

1980 review

In 1980 a review was carried out for the Chancellor. This reached the conclusion that the present basis of operating the relief represented a reasonable balance between maximising relief for the target age group, and minimising administrative complexity and revenue loss through misapplication.

1993 review

In 1993 a working party was set up from industry representatives to comment on the fact that the schedule of maximum sizes and measurements was not receptive enough to changes in fashion. It was agreed that suitability of clothing and footwear by reference to size represented the most meaningful criterion in drawing a borderline for liability. Through negotiation a revised schedule of maximum sizes and measurements was introduced with effect from 1 April 1994 which reflected the move to baggier styles of clothing, and which increased the size of boys’ footwear eligible for relief to 6½.

Alterations to children’s clothes sizes

In 2001 Customs and Excise altered the maximum measurements for determining which garments constitute children’s clothing to reflect the general increase in size amongst the nation’s youth. This was done with help from British Standards Institute and information from the clothing and footwear industries. The notice now puts the emphasis on the trader to prove that the garment they have designed is for a person under 14 and the body measurements used are at or below those in VAT notice714