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HMRC internal manual

VAT Relief for Disabled People Manual

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HM Revenue & Customs
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Definitions and use of terms: meaning and use of the term ‘handicapped’

Meaning

‘Handicapped’ is defined in Legal Note 3 to Group 12 of Schedule 8 of the VAT Act 1994 as follows:

‘Handicapped’ means chronically sick or disabled.

It is a fairly wide definition, covering many of those who are sick as well as those who are disabled.

Use in VAT law

A concept common to the majority of Group 12 is that the goods or services must be supplied:

  • to ‘a handicapped person’; or
  • to an eligible charity which serves the needs of disabled people

for zero-rating to apply.

However, in items 2(g), 2(h) and 2(i), a condition of zero-rating is that the goods must be:

  • ‘designed solely for use by a handicapped person’; or
  • ‘designed or substantially and permanently adapted for use by handicapped persons’.

In this context, the term ‘handicapped’ becomes important as a means of judging whether the goods themselves qualify for zero-rating, and further guidance as to how to make this judgement can be found under the third, fourth and fifth subheadings of VRDP38000.

Tribunal cases

Appeal Decision
   
Aquakraft Ltd (2214) The Tribunal was not prepared to accept that a person was chronically sick or disabled simply by having a slipped disc.
Posturite (UK) Ltd (7848) The Tribunal accepted that otherwise able bodied persons suffering from neck or back pain did not qualify as chronically sick or disabled.
G D Searle & Co Ltd (13439) The Tribunal found that whilst asthma was undoubtedly a serious health problem, that did not mean that all 3 million sufferers were ‘chronically sick or disabled’. On that basis, an aerosol spray for killing off dust mites was ruled ineligible for zero-rating.