Blog Search

Archives

HMRC clarify VAT zero-rating of transport of disabled passengers

HMRC have issued Brief 3 (2019), which aims to clarify that the Department’s policy on the scope of the VAT zero rate for transport services has not changed following the Upper Tribunal (UT) decision in Jigsaw Medical Services Ltd (2018) UKUT 0222.

In this case, the UT heard an appeal by HMRC against the First-tier Tribunal’s decision that emergency transport in a specially adapted ambulance was zero-rated, rather than being exempt.

This decision may be of interest to suppliers that provide transport services in emergency vehicles (ambulances), or in passenger vehicles (such as, out-patient mini-buses) including those adapted for the carriage of one or more wheelchairs.

The supply of transport services for sick or injured persons in vehicles specially designed for that purpose is an exempt supply for VAT purposes.

The supply of passenger transport is zero rated if the vehicle used meets certain seating criteria. The supply of transport in any vehicle with seating to carry 10 or more passengers (including the driver) is a zero-rated supply.

Where a vehicle is designed or adapted to safely carry one or more persons in a wheelchair and, if it were not for those changes alone, the vehicle would seat 10 or more passengers, it is a zero-rated supply.

It is possible for a vehicle designed to carry sick or injured persons to also meet the seating criteria. The transport of sick or injured people in such a vehicle would therefore meet the criteria for both VAT exemption and zero rating. In these cases, the zero rate would take precedence. Not all vehicles designed to carry sick or injured people will meet the seating criteria, so transport of passengers in these vehicles is not zero rated.

HMRC Brief 3 (2019) can be found here.

  • Latest news and testimonials

  • Latest News

    • September Q&A

      Q. I have two small businesses which are treated as a group for VAT purposes, so we only submit a single VAT return covering both …

      Read more
    • Making Tax Digital for Business: update

      In July, the Government confirmed that the Summer Finance Bill would be published in September, with the measures dropped from the pre-election Finance Bill being reintroduced …

      Read more
  • Testimonials

    • Partner – Solicitor

      I have worked with SBL over the last 10 years on numerous matters involving owner-managed business. They are professional, personable, knowledgeable and work incredibly hard to provide the best advice to their clients. I would have no hesitation in recommending SBL.

      Read more
    • Director – Networking Company

      SBL are a professional Accountancy Firm and are exceptionally up to date with all legislations.  SBL know their clients extremely well and what will work best for their business. SBL understands business and how business works and they deliver the very best considered professional advice.

      Read more
    • Director – Retail/Fashion Company

      SBL have provided auditing and other accounting services for our company for more than 10 years. They not only offered excellent support from a professional accountant company, but also delivered forward-thinking advice on how to improve our business.