VRDP16000 - Computer and other electronic devices
Assistive technology (AT) often involves the pre-installation of additional specialist software, which is specifically required by a disabled individual, into a general purpose device.
We have accepted the judgement of the First-Tier Tribunal in Iansyst Ltd (TC05126) that assistive technology systems based on off-the-shelf computing equipment (including laptops, tablets and mobile phones) with pre-installed assistive software can be zero-rated when supplied to disabled people for their domestic or personal use. The view has been taken that such systems as a whole have been “designed solely for use by disabled people”, and thus come within the scope of Schedule 8, Group 12, Item 2(g).
Suppliers of assistive technology will generally prefer to zero rate supplies when they can do so. Thus, the questions will arise: when is a supply ancillary to the main supply, and so part of a single, zero-rated, supply? And when is something a separate supply and liable to the standard rate? Our guidance on single and multiple supplies (VATSC80000) applies.
An AT system can be created, utilising an off-the-shelf computing device, by pre-installing additional specialist software which is specifically required by the disabled individual making the purchase. This allows the complete system to be defined as designed solely for use by that disabled person and so be zero-rated.
Some of the pre-installed software will usually, in its own right, have been designed solely for use by disabled people, and will be zero-rated when sold as physical goods rather than an electronic download. Electronic downloads are treated as electronically supplied services, and are standard–rated. Additional pre-installed speech recognition may also be zero-rated as part of the complete system, even if the speech recognition is not specifically designed for disabled people. There may be other cases where the whole system has been designed solely for use by disabled people, when none of the individual parts have.
AT systems will often be supplied with training on how to use the system. Generally, this may be zero-rated when it is recommended, quoted for (if applicable) and ordered in conjunction with the AT system, invoiced by the same supplier, and supplied within a reasonable period of the main supply. This is because it forms part of a single supply of goods.
For guidance on warranties, please see paragraph 5.3 of VAT Notice 701/7: VAT reliefs for disabled and older people.
Note - There has sometimes been confusion as to whether equipment can be supplied zero-rated for work purposes. The VAT Act wording is “for domestic or personal use”. AT is by definition for personal use, even if this is in a work context. In many cases this will be immaterial as the entity buying the equipment will be registered for VAT and the supply will not be directly to the disabled person. But a purchase by an individual for work purposes can be zero-rated where the personal use requirement is met.