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HMRC internal manual

VAT Relief for Disabled People Manual

Motor vehicles [items 2(f) and 2A]: what does ‘substantially and permanently adapted’ mean under Item 2(f) for a vehicle adapted to carry a person seated in a wheelchair or lying on a stretcher?

The vehicle must provide the necessary space and facilities for a disabled person to be transported in reasonable safety and comfort. The vehicle must also be adapted to carry the disabled person whilst in their wheelchair/stretcher.

If the vehicle is intended to carry a disabled person in a wheelchair, (either as driver or passenger) it will require a permanently fitted hoist or ramp, so that the disabled person can get in or out of the vehicle while sitting in the wheelchair. The fitted hoist or ramp can be removed for storage whilst the vehicle is in motion.

If the vehicle is intended to carry a disabled person on a stretcher, it must have been substantially and permanently adapted to provide access to, and space within the vehicle for the stretcher and suitable fixtures to secure it.

The Tribunal of Emperor Enterprises Ltd (11038) provided criteria by which to judge whether a vehicle is “designed” for a qualifying purpose, or whether its adaptations are “substantial.

The appellant was a designer and builder of coach built motor caravans, who manufactured a vehicle to accommodate a wheelchair. Features included clamps, a ramp, a widened door, plus modification of the kitchen to enable the wheelchair to access the toilet.

The Tribunal agreed that the vehicle was entitled to zero-rating under item 2(f), concluding;

“It was not the case where the appellant adapted an already built motor caravan. He built the whole of the rear part to the customer’s order. It seems to me that that constituted design of the motor vehicle rather than merely its adaptation. That adaptation involved the use of scarce space and was not insubstantial. There was no suggestion that any feature appropriate for carrying a person in a wheelchair was omitted. If this adaptation was not sufficiently substantial, it is not immediately clear to me what adaptation would have been.”

The High Court in Help the Aged ([1997] STC 406 held that since a permanent adaptation to a motor vehicle meant that the adaptation had to be for an ‘indefinite’ period, an adaptation need not be irreversible to qualify the vehicle for zero-rating.