Building and construction work is usually VAT standard-rated but some alterations you make to a disabled person’s home may qualify for zero-rating, which means that you do not charge VAT to your customer. There are also certain goods that can be zero-rated if you supply them to a disabled person.
There are certain conditions that have to apply for goods and services to qualify for zero-rating. It’s important that you get written declarations from your customers confirming that they’re eligible for the VAT relief. It’s your responsibility to make sure that all the conditions for zero-rating apply before you zero-rate your supply.
This guide explains the goods and services that are eligible for VAT relief when they’re supplied to a disabled person. It also gives a definition of who HM Revenue & Customs (HMRC) considers to be a disabled person for the purposes of the VAT relief, as well as sample customer declarations.
Alterations to a disabled person’s home
Some alterations you make to a disabled person’s private home can be VAT zero-rated. These are shown below.
If you’re doing this work as part of building a new home, it may qualify for zero-rating anyway.
Ramps, doorways and passageways
As long as the work you do is to help a disabled person go in and out of their home or move around inside it, you can zero-rate:
building a ramp
widening a doorway or passageway – but not building a new doorway or passage
Building a ramp includes:
raising a floor level to match an existing floor so that steps can be removed
reducing the angle of a slope
creating a slope
Widening doorways and passageways includes:
widening a room that a disabled person goes through to get to another room – for example a bedroom with an en-suite bathroom
widening an existing path across a disabled person’s garden – but not building a new path
In this case the person’s private home includes the garden, yard, outbuildings, detached garages and even an orchard.
Bathrooms, washrooms and lavatories
You can zero-rate the work if you install, extend or adapt a disabled person’s bathroom, washroom or lavatory. But the work must be necessary to suit the disabled person’s condition.
For the purposes of this relief, the following definitions apply:
a bathroom includes a shower room
a washroom means a room that has a toilet or a washbasin (or both) but doesn’t have a bath or a shower, or any cooking, sleeping or laundry facilities
a lavatory is a room with a toilet and maybe a washbasin
In this case the person’s private home includes any outbuildings as well.
When you install, extend or adapt a bathroom, washroom or lavatory and build additional accommodation (such as a bedroom or kitchen) at the same time, the additional accommodation is standard-rated. So you’ll have to apportion your work between the parts that are zero-rated and those that are standard-rated.
Goods supplied in connection with construction services
You might also supply goods – like building materials – when you provide the construction services detailed above. You can zero-rate these goods as long as the construction services themselves qualify for the zero-rating.
Preparatory or restoration work and making good
When you provide any of the construction services detailed above, you might have to do some preparation work, or some restoration or making good may be needed. You can also zero-rate this work.
When you carry out the main construction work in a disabled person’s home, you may have to use an area that was previously part of another room. If you restore the room to its original size, you can zero-rate the work involved.
Work that can be reduced-rated
As well as zero-rating work for disabled customers, you can also charge a reduced rate of 5 per cent for certain other work you do. This includes supplying and installing:
some mobility aids for the elderly
certain heating systems and security goods that are funded by a grant