VAT relief is available on goods and services for people with long-term illnesses or disabilities. 

There are special VAT reliefs available for certain people living with disabilities or long-term illnesses. These reliefs are generally available on certain products and services designed specifically for their personal or domestic use. This VAT relief covers not only the product itself but also installation, repairs, maintenance as well as related spare parts and accessories.

Eligible items typically include adjustable beds, stair lifts, wheelchairs, medical aids, low vision aids (excluding glasses or contact lenses) and home building works such as ramps, widened doorways or lifts. Motor vehicles purchased or leased through the Motability scheme may also qualify.

To benefit from this relief, the individual must meet HMRC’s criteria which usually covers those with a long-term physical or mental condition affecting daily life, chronic illnesses such as diabetes or terminal conditions. Age criteria alone, or temporary disabilities, do not qualify.

Buyers must provide a written declaration confirming their eligibility. Most suppliers will provide a standard form for this purpose.

For imported items, qualifying goods for personal use can benefit from VAT relief if they are properly declared.

Local councils may also offer support or funding for necessary home adaptations, helping ensure greater independence and quality of life for disabled individuals.

Struggling with late-paying customers? The VAT Cash Accounting Scheme helps protect cash flow by taxing only what you have received.

The VAT Cash Accounting Scheme is designed to support businesses by improving cash flow. Using this scheme means that VAT is only paid when your customer pays you and not when you issue an invoice. This means that if a customer fails to pay, the VAT is not payable to HMRC, offering a clear advantage for businesses that sell on credit.

In contrast, under standard VAT accounting, VAT is due whether or not you've been paid, which can create financial pressure if your customer is late in paying or does not pay.

To join the scheme, a business must have a VAT taxable turnover of £1.35 million or less in the next 12 months. Once in the scheme, a business can continue using it until their turnover exceeds £1.6 million.

You cannot use the Cash Accounting Scheme if:

• You are behind on VAT returns or payments.
• You have committed a VAT offence in the last 12 months.
• You are using the Flat Rate Scheme, which has its own method for handling VAT on a cash basis.

There’s no formal application required. You can start using the scheme:

• At the beginning of any VAT accounting period, or
• From the start of VAT registration, if you’re newly registered.

You can leave the scheme voluntarily at the end of any VAT period without notifying HMRC and rejoin again if you continue to meet the eligibility criteria.

Streamline your VAT reporting with fewer returns and smoother cash flow. The Annual Accounting Scheme makes VAT easier to manage for eligible small businesses.

The VAT Annual Accounting Scheme is designed to simplify VAT reporting for smaller businesses with an annual taxable turnover of up to £1.35 million. One of the main advantages of the scheme is that it requires businesses to submit only one VAT return per year, significantly reducing the administrative time and costs typically associated with preparing and filing quarterly returns.

Helping to meet the needs of small businesses, the scheme can be used alongside either the VAT Flat Rate Scheme or standard VAT accounting. It also allows for regular interim VAT payments throughout the year, helping businesses smooth out their cash flow and avoid large, unexpected VAT bills.

To be eligible to join the scheme, a business must be solvent, new to the scheme, and up to date with all VAT payments. However, it cannot be a division of a larger company or part of a VAT group.

Once enrolled, a business will make interim payments based on the previous year’s VAT liability. For newly VAT-registered businesses, these payments are calculated using an estimated annual VAT liability. At the end of the 12-month VAT accounting period, a final balancing payment is made when the annual VAT return is submitted. This final return can often be completed in tandem with the business’s annual accounts, streamlining year-end reporting.

The final balancing payment must be submitted within two months of the end of the accounting period. Businesses can continue to use the scheme provided their taxable supplies remain below £1.6 million and they continue to meet the scheme’s other eligibility requirements.

Small business? The VAT Flat Rate Scheme could cut paperwork and improve cash flow. Pay VAT as a set percentage of turnover and enjoy simpler admin, budgeting ease, and even a 1% discount in year one of your registration for VAT.

The VAT Flat Rate Scheme is designed to simplify the process of VAT accounting for small businesses. Rather than calculating VAT on every sale and purchase, eligible businesses pay VAT as a fixed percentage of their turnover including VAT. The percentage applied depends on the type of business activity and is set by HMRC.

This scheme helps reduce the complexity of VAT compliance by minimising the need for detailed calculations and record-keeping of input VAT on purchases.

To join the scheme, a business must expect its annual taxable turnover (excluding VAT) to be no more than £150,000 in the next 12 months.

The advantages of the VAT Flat Rate Scheme include the following:

1. Simplified VAT Administration
   You don’t need to calculate VAT on every sale or claim back VAT on most purchases, which greatly reduces the time and effort involved in VAT reporting.
2. Predictability of VAT Payments
   Knowing your flat rate percentage makes it easier to predict and budget for VAT payments, enhancing cash flow management.
3. Potential Financial Savings
   If your business has relatively low VATable expenses, you may pay less VAT overall under the scheme compared to the standard VAT accounting method.
4. Ideal for Service-Based Businesses
   Businesses with few goods purchases—such as consultants, IT professionals, and freelancers often benefit especially if they don't fall into the limited cost trader category.
5. 1% First-Year Discount
   The introductory discount provides a temporary boost to cash flow, particularly useful for new or growing businesses.

The scheme can be a valuable option for small businesses looking to simplify VAT reporting and reduce administrative workload. However, its suitability should be carefully assessed and regularly reviewed to ensure it remains beneficial as a business grows or its circumstances change.

Not all VAT-free sales are the same. Understanding the key difference between zero-rated and VAT-exempt supplies could save your business money and prevent costly VAT mistakes.

It's important to understand the distinction between zero-rated and VAT-exempt supplies. While both may appear similar, because no VAT is charged on the sale, the implications for businesses are very different.

If a supply is exempt from VAT, it means no VAT is charged to the customer, and no output VAT is due. However, the downside for businesses is that they cannot reclaim any input VAT (i.e., VAT paid on purchases or expenses related to the exempt activity). This can make exempt activities more expensive to provide, particularly for businesses that incur significant VAT on costs.

Common examples of VAT-exempt supplies include:

• Insurance
• Finance and credit
• Education and training
• Fundraising events run by charities
• Health and welfare services
• Postal services
• Betting and gaming
• Subscriptions to membership organisations
• Selling, leasing, and letting of commercial land and buildings (though this exemption can be waived under certain conditions)

There are exceptions and detailed rules in most of these examples cited above. Whether a supply qualifies as being VAT exempt may depend on how it's structured and who is receiving the service.