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Published on 30 January 2007

VAT and disabled people - the case for removing the barriers

A comprehensive report by the Low Incomes Tax Reform Group (LITRG) is calling for HM Revenue & Customs (HMRC) to review the VAT reliefs given to disabled people. The report also focuses on the need for better administration of the reliefs to make them easier to obtain, and a re-think on VAT that is payable on products not ‘solely designed’ for disabled people.

The report was prepared by the international VAT network of PricewaterhouseCoopers LLP and sponsored by the Nuffield Foundation. It maps how VAT reliefs work across selected European countries against the European Union’s goal of achieving a ‘society that is open and accessible to all’, and against the objectives of UK government policy to remove barriers restricting opportunity and choice for disabled people.

The report was published on Tuesday 30 January 2007.

The following recommendations are made in the report:

  • UK VAT law should be amended to better reflect EU law by introducing a reduced VAT rate on goods used exclusively by disabled people, whether or not they were designed solely for this purpose
  • The UK should introduce equality of VAT treatment by making VAT reliefs available equally to people with mental disabilities
  • VAT reliefs available for modifications to private residences of disabled people should apply equally to workplace modifications
  • HMRC guidance on the available reliefs should be made simpler and more widely available
  • Steps could be taken to make existing UK VAT reliefs more accessible, by reducing or removing the administrative and practical inconvenience of claiming them.
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