VAT Relief on New Cars

A Complete Guide to Buying a VAT-Free Car in the UK

Navigating the process of buying a new or used car can be complicated, and when you add the complexities of VAT relief for disabled people, it can be even more confusing. This guide is designed to simplify the process and help you understand how you can purchase a vehicle without paying VAT.

The most important thing to remember is that this is not a VAT refund system. If you are eligible, the supplier will not charge you VAT in the first place, saving you 20% on the purchase price.

Part 1: The Key Eligibility Criteria

To qualify for VAT relief on a motor vehicle, you must meet all four of the following conditions, as set out by HMRC:

1. You must be a "Wheelchair User".
This is a strict definition for VAT purposes. A "wheelchair user" is a person who normally uses a wheelchair to be mobile. This can include individuals with degenerative conditions who rely on a wheelchair as their primary mobility aid.

• Please Note: This does not include individuals who only use a wheelchair occasionally (e.g., when visiting a shopping centre) or those who use a mobility scooter.

2. The Vehicle Must Be "Substantially and Permanently Adapted".
The car must have been designed or permanently adapted specifically to enable a wheelchair user to travel in it. The adaptations must be fitted before the vehicle is supplied to you.

• Examples of qualifying adaptations include:A hoist or ramp to lift a wheelchair into the vehicle.A swivel seat that rotates out to assist with a transfer from a wheelchair.Specialised hand controls that are integral to the vehicle's operation.

3. The Vehicle Must Be for Your Personal or Domestic Use.
The car must be for your own private use. It cannot be used for business purposes, such as a taxi or a vehicle for a nursing home.

4. You Must Adhere to the '3-Year Rule'.
Since April 2017, you can only purchase one vehicle with VAT relief within a three-year period.

• Exceptions: This rule can be waived if your previous vehicle was stolen, written off in an accident, or if your medical condition has changed, making your current vehicle unsuitable.

Part 2: The Step-by-Step Process

The process for buying a VAT-free car is straightforward, but it must be followed correctly.

Step 1: Find a Qualifying Vehicle
You must find a vehicle that is already "substantially and permanently adapted." This can be a new or used car, but it must be supplied by a VAT-registered dealer who can process the VAT relief.

• Important: You cannot buy a standard, unadapted car from a main dealer and then claim the VAT back after having it adapted. The adaptations must be in place when you purchase the vehicle.

Step 2: Complete the VAT Declaration Form
Your supplier will provide you with a VAT1615A form. This is a legal declaration where you confirm that you meet all of the eligibility conditions above. You will be asked to provide your details and sign the form.

• If you are buying on behalf of a disabled person, you can sign the form as their nominated representative.

Step 3: Pay the Zero-Rated Price
Once you have completed the VAT1615A form, the supplier will process the order without adding VAT. This means you will pay the price of the vehicle minus the standard 20% VAT charge. The supplier keeps the signed form for their records and to show to HMRC if requested.

Frequently Asked Questions

Can I get VAT relief on a used car?
Yes, you can. The same rules apply: the used car must be substantially and permanently adapted, and it must be supplied by a VAT-registered business that is able to process the VAT relief for you.

I only need simple adaptations, like a steering ball. Does this qualify for VAT relief on the car?
No. Unfortunately, simple adaptations alone do not qualify the entire vehicle for VAT relief. The VAT relief only applies to the cost of the adaptation itself, not the car. Only vehicles with substantial and permanent adaptations (like a hoist, ramp, or full hand controls) are eligible for VAT relief on the entire purchase price.

Can I claim VAT back on my existing car if I have it adapted?
No. You cannot claim VAT back on a vehicle you already own. However, the service of having the adaptation fitted can be supplied to you without VAT. This requires a different declaration from the one used for the car itself.

I have a disability but am not a wheelchair user. Can I get a VAT-free car?
No. The VAT relief on the entire car is strictly for wheelchair users. However, you can still get VAT relief on the cost of any adaptations and installation services you require for your vehicle.

Need More Advice?

The process of choosing and buying an adapted vehicle is a big decision. Our team at Mobility Station is experienced in vehicle adaptations and can provide expert advice to help you find the perfect solution for your needs.

Contact us today to discuss your options and to arrange a consultation.