A motorhome is not just a vehicle; it's a home on wheels, providing the liberty to explore and experience the world at your own pace. This freedom should not be limited by physical ability. The UK government has provisions in place to alleviate this burden through VAT relief on adapted motorhomes.
This article aims to guide you through the VAT relief process, the eligibility criteria, and the necessary adaptations to qualify for this tax exemption.
Understanding zero rate VAT
VAT, or Value Added Tax, is usually levied on most goods and services. However, certain items, including motorhomes adapted for disabled users, can be zero-rated. This means that you, as an eligible individual, would not be charged VAT on the purchase of such an adapted motorhome.
This disabled motorhome VAT relief, however, is not a refund scheme; rather, it's a preventive measure. VAT should not be charged at the point of sale if the vehicle meets the qualifying conditions.
Changes to VAT legislation
On 1st April 2017, the UK's HM Revenue & Customs (HMRC) introduced amendments to the VAT relief scheme for adapted motor vehicles, including motorhomes. The changes included limiting the number of vehicles that can be purchased under the relief to one every three years.
Additionally, it became mandatory for customers to complete an eligibility declaration form and for suppliers to inform HMRC about their zero-rate supplies. Penalties were also introduced for incorrect customer eligibility declaration forms.
Criteria for VAT relief
To qualify for VAT relief on a disability motorhome, the mobile home and its user must meet specific criteria. Primarily, the user should be a person who regularly relies on a wheelchair or stretcher for mobility. However, this does not strictly mean full-time wheelchair users only.
Individuals with degenerative conditions, such as multiple sclerosis, who use a wheelchair when their condition necessitates it, or lower limb amputees, might also qualify. It's crucial to note that occasional or temporary wheelchair users, or those using mobility scooters, do not qualify for this relief.
What makes a motorhome adapted?
To qualify for VAT relief, the disabled motorhomes must be substantially and permanently adapted to cater to the specific needs of the disabled user.
This means the vehicle should be designed or modified to enable a disabled person to travel in it, leave it, or drive it. The disabled user can choose to remain in the wheelchair or use any of the vehicle's seats.
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Examples of motorhome adaptations
Several modifications can be made to a motorhome for disabled individuals to make it suitable for their exact requirements.
These adaptations include, but are not limited to, electric handbrakes, hand controls for acceleration and braking systems, travel seat for easy transfer, personal hoists for transferring the disabled user into the bed or shower, boot hoists for lifting portable scooters into the garage area, underfloor lifts for wheelchair access, and steps for those not requiring a lift.
Domestic or personal use criterion
To qualify for VAT relief, the adapted vehicle must be used primarily for the disabled person's domestic or personal use.
This includes everyday usage, such as going to the shops, dropping off children at school, or commuting to work. Incidental use at work is also included, as long as the vehicle's primary function remains for private use.
3 year rule
One of the significant changes introduced in 2017 was the implementation of the '3-year rule'. This rule stipulates that VAT relief is only applicable to one adapted vehicle purchased for the disabled person's personal use within a period of three years.
However, there are approved exceptions to this rule in specific circumstances.
Completing the customer eligibility declaration
An important step in obtaining VAT relief on a accessible motorhome is the completion of a customer eligibility declaration form. This form is mandatory and should be filled out accurately to avoid penalties. The supplier should also provide relevant documents to demonstrate eligibility for the zero rate.
In conclusion, VAT relief on adapted motorhomes for disabled individuals provides a much-needed financial respite. By understanding the qualifying conditions and ensuring the necessary adaptations are in place, disabled individuals can enjoy the freedom and independence that a motorhome offers.
Always remember to fill out the customer eligibility declaration form accurately and provide all necessary evidence to avoid penalties.
Remember, your physical abilities should not limit your adventures. With the right adapted motorhome, the world is your oyster.