HM Revenue and Customs Brief 42/11
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Issued 19 December 2011
VAT: parts and accessories for boats supplied to disabled
people and charities - important change from 1 January 2012
Who needs to read this?
VAT registered businesses that sell parts and accessories for
boats where the boats are designed or adapted for the personal use of a
disabled person, or to charities that make them available for disabled
persons.
What is the change?
From 1 January 2012, the current concessionary arrangement
which allows VAT zero-rating on the supply of parts and accessories
designed solely for use in, or with, boats that are designed or
permanently and substantially adapted for use by disabled persons will
no longer apply.
However, VAT zero-rating continues to apply on supplies of:
- (a) boats that are designed or substantially and
permanently adapted for the domestic or personal use of disabled persons
- (b) parts and accessories that are used in connection with
repairs or maintenance to qualifying boats
- (c) parts and accessories that are included as part of the
single supply of qualifying boats
The reason for this change
The UK VAT law allows parts and accessories designed solely
for use in or with goods eligible for zero-rating in Items 2(a) to 2(g)
of Group 12, Schedule 8 except for parts and accessories for use or
with boats described in Item 2(i).
The concession has allowed parts and accessories that are not
covered by the scope of the relief to be treated as zero-rated. HM
Revenue & Customs does not have the discretion to allow this
concessionary treatment, and it is not possible to put the concession
on a statutory basis as this would contravene EU law. There is no legal
basis in EU law which would permit this concession to be introduced in
UK legislation.
The Government announced in December 2010 that the concession
would be withdrawn on 1 January 2012, to allow businesses a year to
prepare for the change.
The legal basis for the relief
VAT zero-rating applies to parts and accessories designed
solely for use in or with goods eligible for zero-rating in Items 2(a)
to 2(g) of Group 12, Schedule 8, VAT Act 1994. Item 2(h) by default
excludes parts and accessories for boats described in Item 2(i) to be
zero rated.
Further advice
If you have any questions about this change, please contact
VAT Disabled Reliefs Helpline on Tel 0845 302 0203.
About the Author
© Crown Copyright 2011.
A licence is needed to reproduce this article and has been republished
for educational / informational purposes only. Article reproduced by
permission of HM Revenue & Customs.
