New rules have been announced by HMRC regarding VAT relief on motorhomes that have been adapted for use by people who are physically disabled

The updated rules give clarity to motorhome dealers and manufacturers as well as customers.

Previous rules stated that any adaptation must be ‘substantial and permanent’ but there was uncertainty over what actually qualified under these rules. As a result, some dealers and converters were reluctant to sell adapted motorhomes to disabled customers at zero VAT.

This meant some disabled motorhomers were finding it increasingly difficult to find adapted motorhomes to buy.

Now, the new rules have brought clarity and mean the market should open up again for disabled buyers. This has been welcomed by the National Caravan Council (NCC), which represents the motorhome industry.

“Our dealer members will be able to assist disabled wheelchair users through the purchasing process. The new rules on VAT relief clearly state that it must be a ‘substantial and permanent adaptation’ to be eligible to be zero-rated, and supplied to a disabled person who normally uses a wheelchair for their mobility.

“A disabled person with a degenerative condition such as multiple sclerosis, who uses a wheelchair when their condition requires it, or a lower limb amputee is also eligible,” explained the NCC’s deputy director general, Alicia Dunne. “The rules are clear that a mobility scooter user or person who occasionally uses a wheelchair, say, for visiting a shopping centre, or someone who is temporarily disabled due to a condition such as a broken leg would not be eligible. It is good that HMRC has moved to remove any uncertainty in the regulations.”

One company – CMC Reimo in Kent – fought, and won, a High Court case over selling adapted campervans at zero VAT (see May 2014, p26). At the time, HMRC had argued that a total of eight conversions adapted for disabled use should not have qualified for VAT relief. CMC Reimo won, in what was described at the time as a landmark ruling.

This, in part, led to the review of the rules.

The new rules have been welcomed by other dealers and converters. Duncan Wilman, of WildAx Motorhomes, tells MMM: “We still sell zero VAT vehicles and have done for the past few years. We’re just very careful about the information we gather from the customers to make sure that they’re eligible.”

Hilary Shortland, of CMC Reimo, which won the High Court case, added that the new rules should dissuade non-genuine buyers from trying to buy a zero-rated motorhome. “It might be that now the customer is liable for any VAT if the vehicle is found not to qualify, they are not so keen to try and push the rules a little bit too much.”

The new rules include

• A time limit on the number of zero VAT-rated motorhomes that can be purchased. An eligible person will now only be able to buy one every three years.

• The introduction of mandatory new HMRC customer eligibility declaration forms through which a disabled person, or their nominated representative, can claim zero-rated relief on their motorhome purchase.

• Vehicle suppliers, such as motorhome dealers, are to provide information to HMRC about zero VAT-rated motorhomes sold within a prescribed 12-month period.

• Penalties if disabled wheelchair users or their nominated representatives provide incorrect or false information on their customer eligibility declaration form.

Guidance has also been published by the NCC in consultation with HMRC.
HMRC will publish guidelines on the government website 
The NCC is also publishing information for its dealer members, a list of whom can be found here.