CIOT: Budget response: Call for review of VAT reliefs for disabled people
While the increase in the rate of VAT to 20 per cent announced in today’s Budget is unsurprising, the Low Incomes Tax Reform Group (LITRG) are concerned about the position of disabled people who because of their disability have to invest in goods and services that are subject to standard-rated VAT.
LITRG’s Technical Director, Robin Williamson, said:
“As LITRG’s earlier work has shown, the system whereby some essential supplies to disabled people are zero-rated while others are standard-rated lacks coherence and logic. The increase in the VAT standard rate, without a balancing extension of reliefs or reduced rates, will make life yet more difficult for people with disabilities.
“At least, HMRC should now, before 4 January 2011, review the administration of the existing reliefs to make them easier to obtain and better understood.”
Notes to editors
1. In January 2007, LITRG produced a report entitled ‘VAT and disabled people: the case for removing the barriers’. The main recommendations in the Report were:
UK VAT law should be amended to better reflect EU law by introducing a reduced VAT rate on goods used exclusively by disabled people, whether or not they were designed solely for this purpose
The UK should introduce equality of VAT treatment by making VAT reliefs available equally to people with mental health issues
VAT reliefs available for modifications to private residences of disabled people should apply equally to workplace modifications
HMRC guidance on the available reliefs should be made simpler and more widely available
Steps could be taken to make existing UK VAT reliefs more accessible, by reducing or removing the administrative and practical inconvenience of claiming them.
2. The Low Incomes Tax Reform Group (LITRG) is an initiative of the Chartered Institute of Taxation (CIOT) to give a voice to the unrepresented. Since 1998 LITRG has been working to improve the policy and processes of the tax, tax credits and associated welfare systems for the benefit of those on low incomes.
3. The CIOT is a charity and the leading professional body in the United Kingdom concerned solely with taxation. The CIOT’s primary purpose is to promote education and study of the administration and practice of taxation. One of the key aims is to achieve a better, more efficient, tax system for all affected by it – taxpayers, advisers and the authorities.
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George Crozier
External Relations Manager
D: +44 (0)20 7340 0569
M: +44 (0)7740 477374
The Chartered Institute of Taxation
Registered charity number 1037771
www.tax.org.uk
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