No VAT refund on boat for disabled son

Posted: 25th February 2013

boatA father who imported a motor cruiser to indulge his seriously disabled son’s passion for boats has failed to convince the Upper Tribunal that the vessel should be zero-rated for the purposes of VAT. Refusing to grant the father a £20,260 tax rebate, the tribunal noted that the vessel was enjoyed by the whole family and had only been adapted for use by a disabled person after it was imported.

The 40-foot leisure craft had been bought for £135,000 by the father because it was big enough to sleep his family of six and to house his son’s wheelchair. He also picked it because it was fitted with side racks that made it easier for his son, who suffers from cerebral palsy, to get on board.

The father unsuccessfully tried to persuade Her Majesty’s Revenue & Customs (HMRC) that the boat, which he imported from Jersey, should benefit from the exemption from VAT afforded to vehicles, equipment or other goods that are specifically designed to give educational, employment or social help to persons with physical or mental disabilities.

The tribunal dismissed the father’s appeal despite observing that he was ‘justifiably aggrieved’ by a lack of clarity in explanatory leaflets circulated by HMRC and for ‘misleading information’ he had been given by officials on an informal basis in respect of the boat’s likely treatment for VAT purposes.

Noting that wheelchair clamps had been fitted to the vessel only after it had been imported; the tribunal ruled that they could not in any event be viewed as ‘substantial adaptations’ that were necessary for the boat to be used by a disabled person. It was also clear that the boat had not been imported for the benefit of the disabled person alone but for the enjoyment of his family generally. The evidence showed that the boat was extensively used by the family and its guests when the disabled person was not present.