We have had several people call us for clarification about VAT exemption and whether it applies to them. Others have simply put through orders oblivious to the fact that they may be eligible for VAT exemption on The Able Label clothing.
We therefore wanted to help explain VAT exemption on our clothes to help with future orders.
What is VAT exemption?
VAT is a tax that you pay when you buy goods and services as a consumer within the European Union, including the UK. 20% is the standard rate for VAT. H M Revenue & Customs (HMRC) states that “equipment that has been designed solely for people with a disability, chronic or terminal illness or on the adaptation of equipment so they can use it can be VAT exempt”. This means that they pay the retail price excluding VAT.
Who is entitled to VAT exemption?
As per HMRC wording, “people with a disability, chronic or terminal illness” can be VAT exempt. Chronically sick means that you have an illness that is likely to last a long time and disabled means substantially and permanently handicapped by illness or injury. Some disabilities covered by this include arthritis, diabetes, lupus, angina, parkinson’s, stroke, dementia, fibromyalgia, MS and ME.
Please be aware that VAT exemption does not apply to a frail elderly person who is otherwise able-bodied or any person who is only temporarily disabled or incapacitated, such as with a broken limb.
The items must not be purchased for the general use of other able-bodied persons, they have to be for the own ‘personal and domestic use’ of the disabled individual.
What items are VAT exempt?
Only products shown with "excl VAT" prices are available for purchase with VAT exemption.
How do I claim?
To claim VAT exemption when placing an order is simple. When you are at checkout follow these three steps:
1.) Choose "VAT Exempt - United Kingdom" from the ‘country’ drop down options
2.) Complete details fully for all boxes which state ‘Only required for VAT exemption’ on the right hand side of the checkout page.
3.) Tick the ‘Terms and Conditions’ box to confirm you have read and the VAT exemption and store terms and conditions and agree to these.
Please note we will only be able to dispatch VAT exempt orders once we have received a signed declaration with all details completed fully.
What HMRC require
The Government requires that you fill in a simple declaration setting out the nature of your disability and/or chronic or terminal illness. We are required to retain a copy of your declaration and it may be passed to HMRC as evidence of your eligibility.
The Able Label require no proof of your disability or a doctor’s letter, however you need to remember that it is an offence to falsely claim that you or someone you are buying for is eligible for VAT exemption under the guidelines.
What to do now?
If after reading this guide you are still unsure if you or the person you are buying for qualifies for VAT exemption then please read the HMRC guide http://www.hmrc.gov.uk/vat/sectors/consumers/disabled.htm, consult your doctor for clarification or email us at firstname.lastname@example.org where we will be happy to help.