In Richard Baldwin Motorhomes v HMRC [2018] TC06725, the First-Tier Tribunal (FTT) concluded that cycle racks installed to the back of motor homes were qualifying adaptations for disabled persons when used to carry wheelchairs. 

Drugs, medicines and aids for disabled will qualify for zero-rating in some circumstances. This includes where motor vehicles are designed or adapted for certain disabilities.

  • The taxpayer is a motorhome retailer.
  • It zero-rated some of its vehicles on the basis they were adapted to carry a disabled person that usually uses a wheelchair.
  • In many cases a cycle rack was added to the back of the motor home to facilitate the carrying of a wheelchair.
  • HMRC issued an assessment for £83k for two reasons:
    • Not all of the customers usually used a wheelchair so could not qualify.
    • The cycle rack was not a qualifying adaptation.
  • The taxpayer appealed:
    • All customers qualified.
    • There are no existing products that enable wheelchairs to be affixed to the outside of the vehicle.
    • Custom used to be to carry the wheelchair inside and clamp it to the floor of the motorhome. This was unsafe as the floor is made of wood and in the event of an accident the clamps could be torn out and the wheelchair could be thrown.
    • It became standard practice to use cycle racks.

The FTT found that all the customers were usually wheelchair users:

  • One was a blue badge holder and the only possible applicable condition to entitle this customer to a blue badge was that he had mobility issues.
  • One was a carer for an elderly lady. A doctor's note confirmed she could only walk short distances and was prone to falls. The motorhome was sold shortly after her death further showing it was for her benefit.
  • One received the mobility component of the Disability Living Allowance in relation to severe arthritis in hips and spine. Another received the allowance in relation to hip replacement and kidney problems.
  • One had lung emphysema and the Benefits Agency had confirmed in writing that the Disability Living Allowance was available because the person was virtually unable to walk without severe discomfort.

The FTT also found that the cycle racks were adequate adaptations:

  • If you asked the manufacturer what they were for, they would say for carrying cycles.
  • If you asked a disabled person who asked for one to be fitted to their vehicle what it was for, they would say it was for carrying a wheelchair.
  • The sole purpose of the cycle rack, when looked at objectively, is to enable a wheelchair to be carried:
  • Without it the person could not travel as, at the end of the journey, they would be unable to go anywhere.

The FTT allowed the appeal.


Health and welfare: VAT

External link Richard Baldwin Motorhomes v HMRC [2018] TC06725