If you're a wheelchair user in the UK, you may be entitled to purchase a new or used car without paying Value Added Tax (VAT). The VAT exemption applies to cars that are adapted for wheelchair users, making it easier for you to get around and maintain your independence. Here's what you need to know about buying a VAT-free car or Wheelchair Accessible Vehicle (WAV).
To be eligible for the VAT exemption, you must be a wheelchair user or have a disability that makes it difficult or impossible for you to use a standard car. The Gov.uk website defines a wheelchair user as 'any disabled person who normally uses a wheelchair (electrically powered or otherwise) in order to be mobile'.
Someone who only occasionally uses a wheelchair would not normally qualify for the VAT exemption. Furthermore, a mobility scooter is not considered a wheelchair for VAT purposes, so mobility scooter users do not qualify for this relief.
To qualify you must also have a valid driving licence or have someone who can drive the vehicle for you.
The vehicle that you want to buy must be specifically designed or adapted so that wheelchair users can travel in it. HM Revenue & Customs rules state that the vehicle must be 'substantially and permanently adapted', which includes vehicles that have ramps, lifts, swivel seats or hoists to assist with entering and exiting the car or have other modifications to accommodate wheelchair users. These adaptations should be 'bolted or welded to the body or chassis...[or]...wired into the electrics of the vehicle'.
Additionally, the car must be for your own personal use (such as going to the shops, taking the children to school, travelling to and from work) and cannot be used for business purposes.
If you have a question about eligibility, you can send an enquiry to HM Revenue & Customs or call them on 0300 123 1073.
To qualify for the VAT exemption, you'll need to provide some documentation to prove your eligibility. Complete an eligibility declaration form (VAT1615A) and give this to the vehicle supplier when ordering the vehicle.
The VAT1615A Declaration Form For Zero-Rated VAT
The vehicle supplier will ask you about your eligibility and may ask for a statement from a healthcare professional or a local authority confirming that you have a disability that requires an adapted vehicle.
The supplier will then process the VAT exemption on your behalf, and you'll pay the net price for the vehicle, which excludes the VAT.
If you're buying a vehicle from a private seller, you'll need to apply for the VAT exemption yourself by completing the VAT declaration form and submitting it to HM Revenue & Customs.
When buying a VAT-free car, you can either purchase a new or used vehicle from a supplier or a private seller. Many garages specialise in adapted vehicles, so it's worth doing some research to find one that offers vehicles with the specific modifications you need.
When buying a used vehicle, make sure to check that it has been properly adapted for wheelchair use and that all the modifications are in good working order. It's also a good idea to get a professional inspection done and to check that a comprehensive warranty is included before making a purchase to avoid any unexpected repairs or costs down the line.
The 3-year rule for VAT exemption on motor vehicles (introduced in 2017) means there is now a limit on the number of vehicles that can be bought using tax relief. Eligible people with a disability can only purchase one vehicle that meets the qualifying conditions for VAT exemption every 3 years. Exemptions to this rule include situations where the vehicle has been stolen, classed as a write-off following an accident or if a change in the wheelchair user’s condition means that the vehicle is no longer suitable.
The savings made can be substantial. The cost of a new Wheelchair Accessible Vehicle (WAV) can be more than twice the cost of the standard vehicle, as the conversion process can be very expensive, especially if the WAV has had an upfront passenger or wheelchair driver conversion.
If you are buying a car, adaptation installers regularly work with car dealers to adapt vehicles before they are registered, and the 20% VAT saving – which, for example, would total £5,000 when buying a £25,000 vehicle – can go towards the cost of the qualifying adaptations needed for the wheelchair user, such as a hoist, fitted swivel seat or driving controls.
HM Revenue & Customs understand that in some circumstances a wheelchair user may be unable to purchase a vehicle themselves, so an adapted vehicle can be bought by a family member or a carer as long as certain conditions are met.
To support the declaration, the supplier of the vehicle may ask the buyer for additional information and evidence, such as:
The seller of the vehicle has to be satisfied that the declaration is valid, must take copies of the information, documents and correspondence used to support a claim for VAT relief and has to submit a report to HM Revenue & Customs within 12 months of the handover date.
If only minor changes are required to enable a wheelchair user to access or drive a car, then the car itself wouldn’t be exempt from VAT, though the cost of any alterations or adaptations would be zero-rated.
If a person with a disability who is not a wheelchair user needs a motor vehicle to be adapted to meet the needs of their disability or mobility issues, the adaptations can also be zero-rated. Again, the car would not be eligible for VAT relief, but the adaptations would usually be zero-rated.
Your local adaptation installer will be able to give you further help and advice.
In conclusion, if you're a wheelchair user in the UK, purchasing a new or used car that has been adapted for your needs can be an expensive proposition. However, by taking advantage of the VAT exemption, you can save a significant amount of money on your purchase. Remember to check the modifications on the vehicle you want to buy, find the necessary evidence and complete the VAT declaration form to claim your exemption. By doing so, you can maintain your independence and freedom of mobility without breaking the bank.
