VAT Exempt

[ade]

VRDP21000 - Incontinence products - HMRC internal manual - GOV.UK

www.gov.uk

Refer to 'retail sales' and 'zero rated on the shelf (no eligibility declaration required)'.

That's HMRC's internal manual and you can guess from the tone that they're not happy about people being exempt from the full VAT rate, and they've been like that since the legislation was introduced and have allowed confusion to foster as they know that most people live in fear of them and will just pay the tax to avoid annoying them.

 

[tiny]

Don't declare you're VAT exempt unless you actually are.

Absolutely!

The legal commentary states that HMRC were receiving an unexpectedly high amount of VAT on private pad/diaper sales. As a result, they said that shops should remove VAT from diaper sales, and not require a VAT-exemption declaration. (The commentary even says, "We accept that due to their specialist nature only eligible individuals are likely to buy incontinence products." No one told them about us lot, then!)

The idea was to make it simpler/easier/quicker/less-embarrassing for incontinent people to buy diapers, and to make sure that no one was paying VAT when they didn't need to.

Largely seconding what Tiny said, here, but the niggling grey area is that the sellers are required to ensure the legitimacy of VAT exemption by keeping traceable records of who, what and why, but the buyers aren't obliged to provide those details (as far as I'm aware).

They are on most medical supplies, but NOT on diapers*. In fact, the legislation actively says that they SHOULDN'T ask for VAT-exemption declarations. But yes, you're right -- the grey area comes when a company asks for a declaration when none is required!

There is a free-text box to write in the nature of your disability and reason for VAT-exemption. I believe that so long as you complete the declaration truthfully (i.e. don't mention a disability, just write in why you're exempt), it would be legal.

(* - when sold in quantities of 200 or fewer pads to private individuals for personal use, with no other VAT-chargeable products in the same order.)

----

I could ague I need nappies as I have attachment disorder. As attachment disorder is kinda a disability and nappies help with the symptoms it means I am purchasing nappies because I have a disability.

I seem to remember that the law is quite strict on what constitutes a "relevant" disability. I think you'd actually need to be incontinent in order to qualify for VAT-exemption on incontinence products. (Except diapers*, as explained above.)

I think it would be illegal to state that you are buying diapers for a disability that isn't incontinence. However, if you are not incontinent and qualify to buy them VAT-free*, then (back to the grey area), I believe that writing, "Not applicable -- fewer than 200 incontinence pads for personal use," would mean that you stay within the law. But I'm not a lawyer!

If you're really worried, contact the seller and ask them not to force you to make a VAT-declaration when you don't need to.

---

In the UK our law states that if your buying adult nappies for personal use and under 200 nappies you do not have to pay VAT on them as long as you certify they are for personal use only.

Not quite. Diapers/pads* are the one exception where you DON'T need to self-certify.

Online sellers of incontinence items know this and make the rules as simple as possible under 200 it’s a self certification process that requires no proof, no medical certs. It’s literally a tick box to say they are for you i’ve been buying them online for at least 5 years not ever had any issues from HMRC or retailers it’s all legitimate.

If you purchase through Nappies R Us they make VAT exemption easy and they are a lovely company too.

They've got it wrong if you need to self-certify to get VAT exemption on <=200 diapers. You only need to self-certify where you DO have a registered disability (or have something other that pads/diapers in your order).

The NappiesRUs FAQ page below makes it clear that they are talking about disability-related VAT-exemption, for which non-incontinent ABDLs would not qualify:

VAT Exemption Information for personal use

VAT Exemption Information for personal use on Incontinence Products

www.nappiesrus.co.uk

This is how the law works for medical supplies in general (including onesies, etc.). And the same law used to apply to pads/diapers too. But some time ago, the presumption of VAT-exemption for diapers* was introduced. And that's separate to disability-related VAT-exemption.

It's infuriating, because a lot of online shops do this, seemingly unaware of the changes to the law that were years ago now.

 

[bobbilly]

I think it would be illegal to state that you are buying diapers for a disability that isn't incontinence. However, if you are not incontinent and qualify to buy them VAT-free*, then (back to the grey area), I believe that writing, "Not applicable -- fewer than 200 incontinence pads for personal use," would mean that you stay within the law. But I'm not a lawyer!

In the VAT declaration it asks you to write your disability and I always put learning disabilities. I've never put incontinence and I've purchased more then 200 individual nappies at a time. They're always gone through with my purchase.

 

[PampersboyLondon]

Absolutely!

The legal commentary states that HMRC were receiving an unexpectedly high amount of VAT on private pad/diaper sales. As a result, they said that shops should remove VAT from diaper sales, and not require a VAT-exemption declaration. (The commentary even says, "We accept that due to their specialist nature only eligible individuals are likely to buy incontinence products." No one told them about us lot, then!)

The idea was to make it simpler/easier/quicker/less-embarrassing for incontinent people to buy diapers, and to make sure that no one was paying VAT when they didn't need to.



They are on most medical supplies, but NOT on diapers*. In fact, the legislation actively says that they SHOULDN'T ask for VAT-exemption declarations. But yes, you're right -- the grey area comes when a company asks for a declaration when none is required!

There is a free-text box to write in the nature of your disability and reason for VAT-exemption. I believe that so long as you complete the declaration truthfully (i.e. don't mention a disability, just write in why you're exempt), it would be legal.

(* - when sold in quantities of 200 or fewer pads to private individuals for personal use, with no other VAT-chargeable products in the same order.)

----



I seem to remember that the law is quite strict on what constitutes a "relevant" disability. I think you'd actually need to be incontinent in order to qualify for VAT-exemption on incontinence products. (Except diapers*, as explained above.)

I think it would be illegal to state that you are buying diapers for a disability that isn't incontinence. However, if you are not incontinent and qualify to buy them VAT-free*, then (back to the grey area), I believe that writing, "Not applicable -- fewer than 200 incontinence pads for personal use," would mean that you stay within the law. But I'm not a lawyer!

If you're really worried, contact the seller and ask them not to force you to make a VAT-declaration when you don't need to.

---



Not quite. Diapers/pads* are the one exception where you DON'T need to self-certify.





They've got it wrong if you need to self-certify to get VAT exemption on <=200 diapers. You only need to self-certify where you DO have a registered disability (or have something other that pads/diapers in your order).

The NappiesRUs FAQ page below makes it clear that they are talking about disability-related VAT-exemption, for which non-incontinent ABDLs would not qualify:

VAT Exemption Information for personal use

VAT Exemption Information for personal use on Incontinence Products

www.nappiesrus.co.uk

This is how the law works for medical supplies in general (including onesies, etc.). And the same law used to apply to pads/diapers too. But some time ago, the presumption of VAT-exemption for diapers* was introduced. And that's separate to disability-related VAT-exemption.

It's infuriating, because a lot of online shops do this, seemingly unaware of the changes to the law that were years ago now.

I didn’t realise you didn’t even have to complete the declaration when purchasing, all I know is I haven’t paid VAT on nappies in a long time and never had any recourse doing so, so until I get a letter or someone ask for medical certification I will keep buying vat free as they are for my own use and if I don’t need to pay HMRC even better

 

[tiny]

I didn’t realise you didn’t even have to complete the declaration when purchasing, all I know is I haven’t paid VAT on nappies in a long time and never had any recourse doing so, so until I get a letter or someone ask for medical certification I will keep buying vat free as they are for my own use and if I don’t need to pay HMRC even better

Ohhh... hang on... looking at the guidance notes, it seems they they're making a distinction between "retail sales" and "online sales".

I'm pretty sure the legislation hasn't changed, but the notes were updated less than a month ago. NOW, they say this:

Eligible incontinence products, for retail sale to disabled people, are zero-rated on the shelf. In practice, this means that individual customers do not need to provide a written declaration to the retailer confirming they’re eligible for VAT relief.

Supplies of eligible incontinence products over the internet or by mail order also qualify for VAT relief as long as they’re made to disabled people.

Reliefs from VAT for disabled and older people (VAT Notice 701/7)

Find out about which goods and services for disabled people and people aged 60 or over that you should apply zero or reduced rate VAT.

www.gov.uk

I'll have to have another read of the legislation itself, but I don't recall any distinction being made between a physical shop and an online one.

 

[ade]

Ohhh... hang on...

I'll have to have another read of the legislation itself, but I don't recall any distinction being made between a physical shop and an online one.

I'll let you do that one. It came up a while ago, in an earlier post on this subject and I think is in recognition of warehouses and wholesalers who now sell retail online. Still, the off/on the shelf terminology relates to quantity not place of business.

But , ahh, data harvesting: the bread and butter of tyrants, exploiters, persecutors and all alike. It's almost as though they plan to get the zero-rating reversed and then come and get us; why else?

 

[tiny]

VRDP21000 - Incontinence products - HMRC internal manual - GOV.UK

www.gov.uk

Refer to 'retail sales' and 'zero rated on the shelf (no eligibility declaration required)'.

That's HMRC's internal manual and you can guess from the tone that they're not happy about people being exempt from the full VAT rate, and they've been like that since the legislation was introduced and have allowed confusion to foster as they know that most people live in fear of them and will just pay the tax to avoid annoying them.

And that contradicts the guidance in the link I just posted!!! By god, they don't make it easy, do they?! It's almost like no one has even considered the existence of ABDLs!

Your link says:

Supplies of eligible incontinence products over the Internet or by mail order also qualify for VAT relief providing they are made to individuals and not institutions...
...
Retailers, Internet and mail order suppliers who sell more than:

200 disposable pads;
50 washable pads;
5 collecting devices; or
10 pairs of waterproof or leak-proof underwear

to a single customer, must obtain a signed declaration (see VRDP44000) or other evidence from the customer, that confirms that the products are purchases by an individual for domestic or personal use, and not by an institution such as a nursing home.

So that guidance suggests there is NO distinction between physical and online shops, and that a declaration is not required for <=200 diapers.

Also, the wording in the guidance above suggests that a retailer can't sell more than 200 pads to "a customer". When I read the legislation, I understood that it was 200 pads "per order". I think they're being sloppy with their language in the guidance. The legislation itself is what actually matters.

 

[ade]

I think they're being sloppy with their language in the guidance. The legislation itself is what actually matters.

Just like with the SS.......(social security, not the nazi thugs. but then again.....)
You get sick of arguing with them, especially when the courts are on their side by default (they are the same gang, after all). It's staggering the amount of their own laws that they break and you know that you have no viable means of recourse.

 

[tiny]

I'll let you do that one.

Ha ha! I find the law fascinating. I've worked for a few legal corporations (although I'm not remotely qualified in law).

It came up a while ago, in an earlier post on this subject and I think is in recognition of warehouses and wholesalers who now sell retail online. Still, the off/on the shelf terminology relates to quantity not place of business.

Ahhh... maybe... Diapers should be zero-rated for VAT "on the shelf", yet retailers also have a legal responsibility to ask for proof of eligibility if they suspect tax fraud. So... maybe that's where the confusion/conflict lies.

The way that the presumed VAT-exemption was implemented in law was a bit of a bodge. Not all of the language in the old legislation seems to have been updated to unambiguously reflect the changes. (Last time I checked, anyway.)

 

[ade]

Ha ha! I find the law fascinating. I've worked for a few legal corporations (although I'm not remotely qualified in law).



Ahhh... maybe... Diapers should be zero-rated for VAT "on the shelf", yet retailers also have a legal responsibility to ask for proof of eligibility if they suspect tax fraud. So... maybe that's where the confusion/conflict lies.

The way that the presumed VAT-exemption was implemented in law was a bit of a bodge. Not all of the language in the old legislation seems to have been updated to unambiguously reflect the changes. (Last time I checked, anyway.)

It seems to have been a farce of conflicting interests from the outset.
When I first read the legislation, many moons ago, my interpretation was the same as it is now, as it was many a shopkeeper. But, shortly thereafter, shopkeepers started saying that their accountant said to keep records 'just in case' often followed with the phrase 'better safe than sorry' (which is a phrase only ever associated with something potentially dreadful). Since then, almost every seller has erred on the side of caution and taken personal details of buyers. I think that HMRC was trying to encourage a self-implementation of self-policing, which has been the government's preferred method of collecting dues and duties since they first came here, with the spin-off that at least they'll get all the names and addresses of all concerned for use at a later date, when the tax-tide has turned.

It's also worth noting that publicly viewable 'internal guidance/manuals' often differ in tone and detail from legislation and from what's said behind closed doors [for to filter down through the ranks]. I mean this is a gang which tries to push the poverty stricken into taking on loans they have no chance of repaying (and I speak from personal experience on that).
The real purpose of publicly viewable publications is give an air of plausible deniability if ever challenged on issues therein and thereof, with the oft final resort of 'we can't comment on individual cases [data protection act etc]' and journalists never question that lie.

 

[tiny]

Your attitude towards the accuracy of guidance commentary is delightfully cynical, and quite justified (in my humble opinion)!

It seems to have been a farce of conflicting interests from the outset.
When I first read the legislation, many moons ago, my interpretation was the same as it is now, as it was many a shopkeeper. But, shortly thereafter, shopkeepers started saying that their accountant said to keep records 'just in case' often followed with the phrase 'better safe than sorry' (which is a phrase only ever associated with something potentially dreadful). Since then, almost every seller has erred on the side of caution and taken personal details of buyers.

Yep -- that's exactly what I think has happened.

Only disabled individuals buying products designed solely to meet the needs of their disability qualify for VAT-exemption, and must self-certify that they qualify. The exception being diapers, which should be zero-rated "on the shelf". I wonder if that's where the confusion lies:

Related legislation hasn't been updated to mention zero-rated diapers, and I wonder if legal commentators are mistaking "VAT exemption" for "zero rating".

It is the responsibility of the retailer to make "reasonable checks" to ensure that VAT-exemption is legitimate, yet diaper* sales should be zero-rated automatically, no questions asked.

 

[ade]

....... I wonder if legal commentators are mistaking "VAT exemption" for "zero rating". :unsure

I think I've gotten slapped handies before for using 'VAT exempt', but it's common speech rather than legal use.
Most people who hear 'zero rated' automatically think 'rubbish'.

 

[Lewis Badger]

Your attitude towards the accuracy of guidance commentary is delightfully cynical, and quite justified (in my humble opinion)!



Yep -- that's exactly what I think has happened.

Only disabled individuals buying products designed solely to meet the needs of their disability qualify for VAT-exemption, and must self-certify that they qualify. The exception being diapers, which should be zero-rated "on the shelf". I wonder if that's where the confusion lies:

Related legislation hasn't been updated to mention zero-rated diapers, and I wonder if legal commentators are mistaking "VAT exemption" for "zero rating".

It is the responsibility of the retailer to make "reasonable checks" to ensure that VAT-exemption is legitimate, yet diaper* sales should be zero-rated automatically, no questions asked.

Thank you for your response and linking to HMRC, I imagine I'll do the same, saving 20% on diapers is quite decent, though I can afford the extra 20% since as a DL, I don't wear diapers very often, so maybe I won't, but it's good to know in any case.

 

[Dutchdiaperboy93]

Do someone know if it is still possible to get a VAT exemption for an order that is placed in the EU store of ABUniverse? I can not find the VAT Exemption form at the check out page anymore

 

[bobbilly]

Do someone know if it is still possible to get a VAT exemption for an order that is placed in the EU store of ABUniverse? I can not find the VAT Exemption form at the check out page anymore

When I have ordered from Germany and my package goes through U.K. customs they don't add tax on them if they know they are incontinence products like with other things purchased from abroad, a tax is added.

 

[crazything]

Sorry for the long post, as a scientist I’ve tried to be thorough and had a look at the guidance to come so with the following thoughts.

I think that in order for the sale to be zero rated it needs to be made to an incontinent individual:

From VRDP21000:
“The basic preconditions in VRDP05100 must be satisfied. We have always accepted that incontinence products are goods of a kind which qualify for zero-rating. But their supply can only be zero-rated if it is made to:

• an incontinent person (see VRDP04300) - who might for example buy the products direct from a chemist’s shop or a supplier’s mail order catalogue; “

Additionally the preconditions in VRDP05100 are quite clear on disability and still need to be met.

It does say that a declaration is not required in order to purchase the products if the bulk conditions do not apply (<200) but that doesn’t change the above notes.

The products themselves might qualify for zero rating as they are ‘designed solely for use by a handicapped person’ however when you look into the definition or “designed solely” it is a little less clear.

VRDP03100 states the following about deciding if a good is designed solely:

You should also consider the following points:

• Does the appearance and method of operation of the equipment or appliance suggest that it was designed solely for use by a disabled person?
• Is it something of a single-purpose design, that is, manufactured to a design for the sole use of people with disabilities?
• Has it been ‘planned and fashioned’ in such a way as to render it for use solely by a disabled person?
• Would it be used solely by disabled people?
• Would it be of similar value to people other than those with disabilities?

If it was designed solely for use by disabled people, but has subsequently been used by a wider range of people, then it would continue to qualify for zero-rating.

Does the presence or designs and patterns alter the diaper to the extent that it would no longer be considered to be designed solely for disabled people? Indeed what about diapers that are designed specifically for ABDLs? They are still functionally diapers but are certainly targeted at a different market.

Having had a look through I think that diapers that are purchased by ABDLs for personal use do not qualify for zero rating however I am more than happy to be argued against!

 

[tiny]

Having had a look through I think that diapers that are purchased by ABDLs for personal use do not qualify for zero rating however I am more than happy to be argued against!

Ooh -- that is a really interesting question!

I can see your point, but I the legislation and commentary clearly refer to "incontinence pads" (which would include diapers). The "off the shelf" zero-rating applies to any individual, regardless of disability. And there's no legal distinction between a medical diaper and an ABDL one. So I think ABDL diapers should be zero-rated too.

The problems I've experienced are when a company requires you to fill out a VAT-exemption declaration, when that isn't required by law and the diapers should be zero-rated automatically. Is it legal to complete the VAT-exemption form, ignoring the request to state your disability, and instead writing that the products should be zero-rated regardless of disability? It's not making a false declaration...

 

[willnotwill]

I should point out, all this refers to domestic sales (or with the EU until that is over). For those overseas buying from UK (or EU for that matter), you are already VAT exempt for anything. Even if you buy while in the country as long as you take it out, you can get VAT refunded at the airport on the way out. Usually, not worth the effort unless you've bought something big (I bought a lot of opal jewelry for my wife when in Australia, there it made a difference).