VAT: Exemptions

Mr. Hoyle
To ask the Chancellor of the Exchequer what discretion there is in applying exemptions from VAT for work carried out on a disabled person's home after the work has been completed.

Dawn Primarolo
The VAT reliefs for alterations to a disabled person's private residence include a zero rate for the provision, extension or adaptation of a bathroom, washroom or lavatory, and for the construction of rampsand the widening of doorways or passages to facilitate entry into, and movement within, the building. However, zero-rating is not available for all building work carried out on the homes of disabled people and EU VAT agreements, signed by successive Governments, do not allow us to extend the scope of our existing zero rates or introduce new ones.

If a customer has been charged the standard rate of VAT on a supply that was correctly liable to the zero rate, he or she should contact their supplier to obtain a refund of the amount they consider the supplier has overcharged. In turn, the supplier can recover from HM Revenue and Customs (HMRC) the VAT for which he has over-accounted to them, subject to certain time limits. In cases of doubt the supplier should contact HMRC's Charities and Disabled Reliefs Helpline on 0845 302 0203.