BUILDING WORKS FOR THE DISABLED

VAT is a tax on the purchase of goods and services and is intended to be a cost burden to the end user or consumer – irrespective as to whether that user or consumer is a disabled individual, church or indeed charity.

That said, whilst there is no blanket or indeed automatic VAT reduction, relief is available as a two stage process:

  • the right type of ‘user’, and
  • the right type of ‘works’

VAT relief is applied at it’s widest when supplied to a disabled individual (for example churches and day centres qualify less for relief than say an individual in their own home). Once eligibility is proven – like most other forms of VAT relief – it is then necessary to determine to what extent it applies.

The type of expenditure qualifying for the zero rate of VAT is:

  1. Supply & Fit of specialist equipment. This must be ‘designed for’ or ‘adapted for’ use by the disabled – and not just items used by or for a disabled person.
  2. Building Works. A very limited and specific list:
    • Formation of disabled washrooms & bathrooms
    • Widening of (existing) doors and passages
    • Formation of ramps & lifts

Therefore, whilst many schemes we see are wholly for the benefit of a disabled person or intended to form a ‘house for life’, it is rare that the VAT savings reflect this; especially poignant where carer suites and sensory bedrooms / playrooms are needed (works that are ineligible for VAT relief).

In the same vein, churches and charities often presume that they benefit from VAT relief on adaptations for disabled members of the community, unaware that the tests for lifts and level threshold are rarely met in public buildings.

Our Consultants are well versed in the nuances of what constitutes ‘eligible’ adaptations, and of more value, how relief can be extended to preparatory and restitution works. Particularly for the latter, it is important that any application to HMRC for discretionary relief is based on cold clinical VAT facts, substantiated with past case precedents wherever possible, and not on a ‘common sense & logic’ basis (approaches that are rarely applicable to the world of VAT….)

Just being a disabled person or undertaking works for a disabled user is not in itself sufficient. Before any Contractor or Supplier can zero rate their supply it is mandatory for them to hold evidence of eligibility and proof as to what extent the lower rate can apply.

VAT RELIEF FOR THE DISABLED

How can we Help?

 

COURT OF PROTECTION & TRUSTEES

 

Whilst a Contractor has no obligation – professional or moral – to seek and explore VAT savings for their client (the default VAT charge is always 20% unless proven otherwise), Deputies & Trustees do have an obligation to ensure client funds are expended in the most efficient manner.  There is also the delicate matter of due diligence……….

  • have you demonstrated that VAT was considered on the scheme at the outset?
  • does the budget therefore allow for the true VAT burden – or if a reduction is applicable, is it supported by evidence?
  • if relief is indeed applicable, who is providing the Audit to the Contractor?
  • is it from an accountable source and covered by PI?
  • is it in the client’s interests to pursue the VAT relief?  Especially poignant for low yield schemes where savings may not warrant the costs of an Audit
  • does your scheme warrant special consideration by HMRC for restitution relief?

We work with major Court of Protection Deputies to provide definite solutions to these questions.

– our Helpline is a free of charge service to establish any scope for VAT savings. There is therefore no cost barrier to due diligence or indeed routine enquiries

– our fomal Audits are undertaken by dedicated Consultants

– our findings are fully underwritten & designed to maximise VAT savings.  There is no need or advantage in taking an aggresive approach.

– if the projected VAT savings are unlikely to cover fees we will say so.

Our role is to provide absolute certainty and absolute protection – to both you and your client.

HYDROTHERAPY POOLS

 

As with all forms of equipment, we need to demonstrate that the item in question is ‘designed or adapted’ for a disabled person as opposed to being intended for the use of a disabled person.

A swimming pool is no different and we need to show that it has been sufficiently adapted to specifically suit disabled users.  The question of hydrotherapy pools has been the subject of debate in past Tribunal Cases and we can use these to construct a list of adaptations necessary to define a pool as eligible for relief.  We can then match these ‘hallmarks’ to the needs and circumstances of the user in-order to secure VAT relief.

 

RESTITUTION RELIEF

 

The VAT Guidance previously contained a little-known concession that allowed zero rating on the relocation or replacement of a room subsequently taken for the purpose of a disabled toilet or washroom.  As an example, if a kitchen was converted into a disabled washroom; we were permitted to zero rate the subsequent building of a new kitchen – even if that kitchen was within a purpose built extension.

The latest version of the VAT Guide has a glaring hole where this sentance used to be – with Customs stating its withdrawal was only intended to ‘improve readability’.  We have had informal confirmation that they will still consider its application on a case by case basis – indeed we have secured relief for an individual recently, however the eligibilty tests appear to be much stricter and subject to additional design considerations.

Architects and designers should be aware of this when creating schemes, as it may influence the design in some circumstances.  For suitable schemes having reference to the particular design contraints in the D&A statement is especially useful – likewise for pools incorporating the necessary features at the outset is of paramount importance.

CHARITIES & CHURCHES

 

As mentioned elsewhere, charities and churches are expected to suffer the burden of VAT like any other consumer. The (limited) VAT relief available to disabled individuals is subject to further caveats when the works are to a charitable or religious building; and centre around two key questions

  1. What is the type of building where the work is to be undertaken?
  2. Who is the intended user of the building?

General adaptations that cannot be specifically assigned to use by the disabled may well attract VAT in full; for example a lift in a church where said lift could be used by non-disabled users.

COMPLIANCE

 

Disabled adaptations are subject to the Eligibility Certificate regime.  As with all forms of VAT relief, savings are only primarily available on Contractor’s invoices, although exceptionally certain equipment and materials may be purchased directly at the Zero Rate.

We can assist in ensuring that the applicable relief is identified at the earliest possible opportunity; ensuring budgets are accurate and Contractors are presented with the formal audit trail required.

We can guide you through this process and supply all of the paperwork and supporting evidence HMRC would expect – this may require seeking a Written Approval, especially with regards to the current uncertainty on ‘reprovision’ and enabling works.

Please contact us to informally explore the scope for VAT savings on your scheme – and if we feel we can bring value or deliver VAT savings – what fee would be required for the formal process.

Our Helpline is however wholly free of charge.

FREE VAT HELPLINE

You can contact our Free VAT Helpline 24 hours a day using the online form or email help@bbvat.co.uk

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Berthold BauerThe Disabled