Conditions for zero-rating
The basic preconditions in VRDP05100 must be satisfied. We have always accepted that incontinence products are goods of a kind which qualify for zero-rating. But their supply can only be zero-rated if it is made to:
- an incontinent person (see VRDP04300) - who might for example buy the products direct from a chemist’s shop or a supplier’s mail order catalogue;
- any charity that makes the products available to incontinent people - see ‘Notice 701/31 Health and care institutions’;
- certain other eligible bodies which pay for the goods wholly from charitable funds or with voluntary contributions; or
- a charitable care institution that provides care or treatment to people, the majority of whom are disabled people.
The relief does not apply to:
- purchases funded by the National Health Service (NHS); or
- any supplies made to non-charitable care institutions.
In certain circumstances a disabled person does not need to complete an eligibility declaration (see VRDP44000) in order for the products to be zero-rated.
People who are incontinent and live in their own homes are entitled to buy incontinence products at the zero rate. Eligible incontinence products such as
- disposable and washable incontinence pads including pads that are incorporated in briefs;
- underwear designed for use by an incontinent person such as underwear that is waterproof or leak proof; and
- collecting devices
may be zero-rated on the shelf (no eligibility declaration - see VRDP44000 - required) provided that the number purchased does not exceed that set out in Bulk sales. We accept that due to their specialist nature only eligible individuals are likely to buy incontinence products.
Internet and mail order sales
Supplies of eligible incontinence products over the Internet or by mail order also qualify for VAT relief providing they are made to individuals and not institutions - see Bulk sales.
Retailers, Internet and mail order suppliers who sell more than:
- 200 disposable pads;
- 50 washable pads;
- 5 collecting devices; or
- 10 pairs of waterproof or leak-proof underwear
to a single customer, must obtain a signed declaration (see VRDP44000) or other evidence from the customer, that confirms that the products are purchases by an individual for domestic or personal use, and not by an institution such as a nursing home.
Nursing homes / National Health Service (NHS)
Only charitable care institutions that provide care or treatment to people, the majority of whom are disabled, and purchase products with their own funds can benefit from the VAT relief. Such institutions should complete an eligibility declaration - see ‘Notice 701/7 Reliefs for disabled people’.
Non-charitable nursing homes, hospitals and the NHS are not eligible for VAT relief on the purchase of incontinence products.