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HMRC internal manual

VAT Transport

Zero-rating of passenger transport: Transport of disabled passengers

A vehicle which has been constructed or modified to cater for the special needs of people with disabilities may have had its carrying capacity reduced to less than ten persons, thus disqualifying associated transport services from zero-rating under item 4(a). However, supplies of passenger transport services using such a vehicle may be zero-rated under Legal Note 4D to Group 8.

The Note was introduced with effect from 1 April 2001 (replacing an earlier Extra Statutory Concession) to prevent vehicles with a conventional seating capacity of 10 or more (which would have qualified for zero rated passenger transport) being taxed when they carried less than that capacity after adaptation for people with disabilities. It covers private operators and local authorities, even in circumstances where that authority makes commercial charges.

The Note applies to a vehicle which has:

  • a nominal carrying capacity of ten or more persons conventionally seated; and
  • a carrying capacity of less than ten persons when equipped with conventional seats and/or facilities specifically designed for the use of passengers with disabilities.

The Note does not apply if:

  • the vehicle has a nominal carrying capacity of less than ten persons conventionally seated (for example, if it was originally constructed as an eight-seat minibus); or
  • the vehicle’s carrying capacity has been reduced for any other reason than to provide facilities for the disabled (for example, to carry goods), even if the vehicle is later equipped for the carriage of disabled persons.

If a vehicle has been adapted to carry disabled people, it qualifies for passenger transport relief, subject to the other conditions, even if it is not actually used by disabled people.

Note: Strictly the law refers to adaptations for the carrying of wheelchairs but the policy has always been slightly wider in recognising adaptations necessary to carry disabled persons, so may extend to stretchers etc.