VTRANS020900 - 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, passenger transport zero-rating applies to all vehicles, designed, or substantially and permanently adapted, for the safe carriage of persons in a wheelchair, and where that vehicle if not so designed or adapted, is capable of carrying no less than 10 persons.

Legal Note 4D 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.

How to decide if a vehicle can carry 10 or more people

This must be considered by reference to the actual and anticipated ways in which the vehicle is or will be used. Simply demonstrating that ten seats can fit in a vehicle is insufficient to apply the zero rate.

To meet the seating criteria, the seats must also be usable in a sensible way and in acceptable circumstances. The vehicle must meet the seating criteria at the time the supply of transport takes place.

Sensible and acceptable circumstances include:

• Complying with legal requirements concerning design, construction and operation of vehicles to ensure the safe transport of the passengers in the vehicle.
• Passengers must be able to safely access and use all the seats without being impeded by fittings and fixtures.

Adapted Vehicles

The rule on adaptions for wheelchairs permits transport in vehicles, that would have 10 seats but for the adaptions for the carriage of a wheelchair, to be zero-rated. It is not intended to permit transport in any vehicle with less than 10 seats to benefit from the zero rate on the sole basis that, independently of its actual or anticipated use, it could theoretically be redesigned and have additional seats added that would bring the total to at least 10.

The following questions may assist in applying the tests for zero-rating:

• Does the vehicle have 10 or more seats that can all be safely used at the same time?

If so, the provision of transport passenger services zero rated.

• Is the vehicle designed or adapted to safely carry one or more persons in a wheelchair?

In the case of E-Zec Medical Transport Services Ltd [2022] UKFTT 302 (TC), the First-tier Tribunal ruled that a ‘wheelchair pen’, a ‘tracking’ flooring system and ‘tip and fold seats’ in a non-emergency patient transport vehicle were all adaptations for the safe carriage of a person in a wheelchair for the purposes of Legal Note 4D.

If there are no modifications and the carrying capacity is reduced to 10 or less seated passengers, the zero rate does not apply.

If, however the vehicle has wheelchair modifications, consider, if removed, the number of seats, that can be installed into the resultant space.

• Does the number of actual seats plus the notional seats equal 10 or more seats that can all be safely used at the same time?

If so, the transport in that vehicle is zero rated.

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 vehicles adapted to carry stretchers.