New guidance on which assistive technology products and services can be zero-rated for VAT will be coming soon from HMRC.

Member Ian Litterick of iansyst has been working with HMRC to write updated guidelines for both companies and VAT officials.

The guidance will make it clear for the first time that mobile devices can be sold zero-rated for VAT, if they meet certain conditions.

“Computer devices and systems are increasingly being used as aids to disability,” writes Litterick, who won a landmark VAT tribunal case in 2016 when he argued that a mobile phone was part of the CapturaTalk application he sold and should be supplied to disabled users without VAT.

“Most are general use products which may be useful for disabled people but are designed to be used by disabled and non-disabled people alike including desktops, laptops, tablets, smart phones and ereaders,” Litterick continues in the draft guidelines.

“Such products can be bought VAT free when they are sold as part of an assistive technology system.

“This involves pre-installing specialist software specifically required by the disabled individual making the purchase, which enables the complete system to be defined as designed solely for use by that disabled person.”

The VAT relief does not extend to the separate purchase of download software licenses that are not pre-installed as part of an AT system.

These will be treated as e-services, according to EU law, and liable to standard rated treatment, unless the software is supplied as physical goods, in other words on a disc or other storage device.

Read the draft guidelines in full and email your comments to Ian Litterick.

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