Finance Bill

In amendments 26 and 27, I seek to draw the Committee's attention to another of what I view as the deeply regressive and painful effects of clause 3—the VAT clause—on some of the most vulnerable in our society, in this instance disabled people. Government Members might be under the impression that disabled people are exempt from the effects of VAT—I have heard that said in other debates—but I hope to demonstrate that this is not the case and that they, like many of the most vulnerable in our society, will be impacted negatively by clause 3 and the Budget overall. Amendment 26 would require the Government to review the way in which current rate reliefs on items needed by disabled people are applied and to address the significant anomalies that exist in the provision of such reliefs. Amendment 27 covers items that are not wholly designed for use by disabled people, but which, although largely used by them, are not exempt from VAT and are therefore chargeable at the standard rate, and it makes the suggestion that they should be exempt from the increase to 20%. Many goods and services are currently exempted, yet the existing administration of the provision of the rate relief is full of anomalies in its application in this country and is applied far more differently from in many other European countries. The interpretation of what constitutes an item that is VAT deductible or VAT refundable is certainly much narrower in this country than it is in many other EU countries, and there are also anomalies, which I propose briefly to list. The first anomaly concerns VAT relief on works carried out to residential accommodation, where often only partial rate relief is applied. By way of example, I refer the Committee to the tribunal case of Brailsford v. The Commissioners for Customs and Excise, which related to the change to Mrs Brailsford's house to accommodate a renal dialysis unit. There was rate relief on the unit and the installation of a toilet in her house, but the extension to the house to accommodate the required renal dialysis machine was not subject to any rate relief, so the case was rejected by the Excise and she had to pay full VAT on the unit. The second matter that I want to discuss is the way in which the Bill refers to items designed specifically and solely for the use of disabled people. Unfortunately, this exempts many items that people require that have not been specifically designed for use by the disabled. An example is to be found in the tribunal case between Mrs B Symonds and Customs and Excise. She had multiple sclerosis and needed to use an air purifier to make her life more bearable. It had not been specifically designed for use by disabled people, however, and was therefore not allowable under VAT relief regulations. She was therefore forced to pay the full price. A third important area is the difference between physical and mental disabilities. Under the current legislation, people with physical disabilities obtain VAT relief for many items, but people with mental disabilities have far less access to that relief. A classic example is patients with epilepsy, who are often not designated as handicapped. They therefore do not get rate relief on items such as the alarms and motion sensors that are vital for detecting their sometimes life-threatening epileptic episodes. The last item I want to talk about is transport, in which an enormous anomaly exists. People who need a wheelchair or are subject to the high rate mobility component of the disability living allowance get full rate relief. They are able to purchase adapted cars and get full VAT relief on them. However, a person who has two prosthetic arms—as does another Mrs Simmons—would find that they did not get any VAT relief whatever. They would be obliged to pay for the full adaptation of their car and would not be subject to VAT relief.