In the May issue of Call Sign, we ran
an exclusive interview with the Minister for
Transport, Tony McNulty. While he answered most of
our questions, there was one that he couldn’t reply
to and suggested that we approach the Treasury for
an answer. The question was:
"One of your Ministerial
responsibilities concerns mobility, so you will be
well aware of the gradual development of London
Taxis to the point where every one of them is now
wheelchair friendly and have colour-coded assistance
handles inside for those with sight deficiencies. No
doubt without these facilities the cost of a Taxi
would be less that the current £32,000 average.
Would it not be feasible then to look at the total
cost involved for these disability benefits and
remove the VAT element on that part of the cost? So
few cabs are sold that it would make no difference
to HMG coffers, but any reduction in VAT on new cabs
would be of help to those buying the vehicle and indeed
help LTI to sell more We spoke to the
Treasury who passed us over to HM Customs |
CALL SIGN EXCLUSIVE!
VAT AND THE TAXI DISABLED |
Tony McNulty: Couldn't answer
our questions.
vehicles…"
and Excise from whom we
received an answer that we reprint below…
"VAT was always intended as a broad-based tax on the vast majority of
goods and services, and reliefs from it have always
been strictly limited. There is therefore no general
relief on the goods and services purchased by
disabled people. However successive governments have
sought to relieve the impact of VAT on disabled
people through a targeted package of zero-rated
reliefs relating to their specific needs and
activities.
One such relief is the zero-rating of the supply to a disabled |
wheelchair user of a motor vehicle
that is designed or substantially and permanently
adapted to enable that disabled person to drive or
to be
carried in the vehicle. The motor
vehicle must be adapted prior to
purchase for zero-rating to apply. This relief also
applies to a charity which makes such a vehicle
available to a disabled wheelchair user for his
domestic or personal use.
However, zero rating will not apply to the conversion of a taxi to
enable it to carry disabled passengers. We cannot
extend zero rating to vehicles not supplied to the
disabled person or to a charity because
long-standing formal agreements with our European
partners allow us to keep our existing zero rates,
but do not allow us to extend them or introduce new
ones.
A taxi driver who is registered for VAT will be able to reclaim
the VAT on the purchase together with the VAT on any
adaptations required to make the vehicle suitable
for carrying disabled passengers." (Editor’s
comment page 3) |
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