VAT Notice 701/7: VAT reliefs for disabled and older people
(https://www.gov.uk/government/publications/vat-notice-7017-vat-reliefs-for-disabled-people)
4.6 Computer devices and systems
Computer devices and systems are increasingly being used as aids to disability. 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. Such products can only be bought VAT free when they are sold as part of an assistive technology system. This involves pre-installing additional specialist software specifically required by the disabled individual making the purchase, allowing the complete system to be defined as designed solely for use by that disabled person. The disabled person must sign a standard declaration that they are disabled and that the supply is for their domestic or personal use. The supplier must keep this as evidence for zero rating. See 3.6 above. The declaration may not be necessary in respect of the Disabled Students’ Allowances scheme as only eligible persons are entitled to DSA but a copy of the report detailing the purchaser’s specific requirements must be kept.
If an assistive technology (AT) system can be liable to the zero-rated VAT treatment, then other “ancillary” supplies and services may also be zero rated if made as part of a single supply. (See 5 above. “Services of installation, repair, maintenance, warranty and adaptation of goods”). This includes installation and setup, repair, maintenance and training on the assistive technology system when the training is given as a part of the supply.
Training will often be a separate supply, in which case this will be subject to VAT.
The zero-rated relief does not also extend to the separate purchase of download software licenses not pre-installed as part of an AT system. These will be treated as e-services, liable to standard rated treatment, unless the software is supplied as physical goods.
Some supplies such as a Braille printer or Braille keyboard may also be zero rateable as part of an assistive technology system, or even when sold on their own, because they were themselves designed solely for use by disabled people. Other peripherals such as scanners, printers and cameras may also be zero rated if they form part of a single supply and are ancillary to the main supply.
In schemes such as the Disabled Students’ Allowances there is an independent assessment of need. Otherwise the supplier must record and keep evidence (on the eligibility declaration for example) as to why they have zero rated such elements as part of an assistive technology system. All decisions leading to zero rating must have their evidence recorded in an auditable trail for any subsequent inspection.
In order to zero rate individual products, whether hardware or software, the manufacturer or importer must certify that it has been designed solely for use by disabled people. A copy of this certificate should be provided to any reseller who intends to zero rate the product. If in doubt, the manufacturer or importer should apply for confirmation from HMRC as per paragraph 4.5.3 above.
This approval process is not required for each assistive technology system that includes an off-the-shelf computer device, which is why suppliers are advised to keep auditable documentation of each decision that leads to zero rating the whole system. This is so they can evidence meeting all three criteria for the zero-rating of equipment and appliances under the VAT Act 1994 Schedule 8 Group 12 item 2(g). The equipment is:
(i) designed solely for use by a disabled person,
(ii) supplied to a disabled person (or a charity that makes it available for use by a disabled person), and
(iii) is for domestic or the personal use of the disabled person.