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Changes to adapted vehicle VAT tax relief in 2017

Changes to adapted vehicle VAT tax relief in 2017

The Government have introduced draft legislation to the Finance Bill 2017 which will require changes to how VAT tax relief is applied to vehicles adapted for wheelchair users from 1st April 2017.

Since 2012 the Government have been reviewing how the relief could be reformed to prevent fraudulent abuse of the scheme.  A consultation launched by HMRC in 2014 has led to new policies which will come into force next year.  The changes will require that:

  • Only one vehicle can be purchased by a disabled wheelchair user every three years subject to it being stolen, damaged or no longer suitable for use.
  • Use of Gov.uk eligibility forms  will become mandatory when claiming the relief
  • Motor dealers will be required to send information on sales of VAT relief vehicles to HMRC.  The information will be specified by a public notice.  Further information and guidance on this is expected early next year.
  • Penalties will apply for incorrect declaration, the equivalent to the standard rate of VAT chargeable.  Where fraudulent intent can be established the individual can be prosecuted in  a criminal court.

Further information can be found by clicking here.