Comment: Understanding VAT relief on mobility products
In an ever-increasing digital world transparency in pricing is more than just good business practice – it’s a necessity, writes Julia Phipps, Director of The Ability Superstore…
Remember the old days of retail? Customers came into a shop to have a browse, ask questions and try out a product before completing a purchase. How times have changed!
The internet provides many great opportunities for businesses allowing a “shop window” of products and useful information for customers to peruse before making a purchase which is then delivered direct to their door without the need to traipse to the local high street. Ideal for many of our core customer base you would have thought!
However the internet can be daunting place for many of our audience and the variety of prices on offer frequently causes confusion. So why is this allowed to be the case? Surely all businesses need to follow the same rules? And if not, what is the root cause of this confusion?
Price transparency
In our world of mobility and disability aids, transparency in pricing is more than just good business practice – it’s a necessity for the wellbeing and trust of our customers.
Our customers are usually older adults, disabled individuals and those living with long-term conditions which means that many of the products we sell are essential rather than just a “nice to have”.
Why then, does pricing of the same item often vary considerably from one business selling on the internet to another? Dig a bit deeper and you will often discover that the answer is a disparity caused by Valued Added Tax – more commonly known as VAT.
The standard rate of VAT increased from 17.5 per cent to 20 per cent on 4 January 2011 in order for the Government to help cut its deficit in that time. (Familiar story to the position we appear to be in today in 2025!)
The majority of businesses based in the UK are registered for VAT – the threshold now being a turnover of more than £90,000 within a 12-month period.
This means that most of the items sold in the UK are subject to 20 per cent VAT on them with the VAT registered retailer having to pay the 20 per cent VAT element collected from the sale across to HMRC on a regular basis. In the majority of other market sectors the “regular basis” is quarterly – completing quarterly VAT returns.
However the mobility industry is different to most industries in that many of the items sold within our sector can be sold with “VAT relief” (ie. no VAT included). This applies when an item qualifies (ie. it was specifically designed or adapted for a disability) and the person the item is being purchased for qualifies (ie. they are disabled and they have a physical or mental impairment). In order to prove qualification the customer is required to complete a simple self-declaration form.
At this point it’s worth noting that the Government clearly state that individuals do not qualify if they’re elderly but not disabled, or if they are temporarily disabled – for example with a broken limb.
The fact that a large proportion of the UK population – 16 million people (according to the House of Commons Research Briefing, August 2023) are “disabled” in some this means that a lot of the mobility products sold both online and in stores are sold without VAT and for this reason many mobility businesses complete and submit monthly VAT returns, rather than quarterly, thereby aiding the cashflow of the business.
VAT relief education
It’s easy to educate the customer in store about VAT relief advising whether a customer qualifies or not. However it is not so clear online and, over the years, we have found that many customers don’t even realise that they do qualify for VAT relief – 20 per cent off represents a large and worthwhile saving to most consumers.
For instance, a mobility scooter listed at £1,000 may appear to be a bargain, but if that price is VAT-inclusive and the customer is eligible for VAT relief, the actual cost could be significantly lower – around £833.
Disparities in the mobility industry
Yet very many businesses, particularly those trading on marketplaces, such as Amazon and eBay, fail to include any VAT in their prices and neither do they obtain any self-declaration form for VAT relief from the end customer.
This causes many issues – it unnaturally distorts the market and confuses customers who see a vast range of different prices for the same item – usually because many prices they are reviewing do not include VAT, making the cheapest price 20 per cent below the rest of the market.
Like most of us, when we are shopping, particularly online where price comparisons are so easy to see, we are drawn to the cheapest option, often highlighted through paid ads on search engines like Google or results served up on Amazon or eBay.
The Digital Markets, Competition and Consumer Act (DMCCA) places a clear obligation on businesses to avoid misleading marketing. This includes ensuring that any pricing reflects the actual amount payable by the intended customer, including clear differentiation between VAT-inclusive and VAT-exempt/relief pricing.
Yet, despite this, many online businesses fail to provide the necessary transparency either leaving vulnerable customers at risk of overpaying or, worse still, by not providing the correct information to allow customers to obtain their 20 per cent VAT refund when marketplaces, such as Amazon, do not differentiate between prices including or excluding VAT. At this point it’s worth noting that Amazon states that ALL prices on its marketplace within our sector need to include VAT at the applicable rate – ie. 20 per cent.
The customer perspective: Confusion and frustration
For consumers, the stakes are high. Those with disabilities or long-term conditions are often on fixed incomes or managing significant healthcare costs. Unexpected price differences can lead to financial strain or, worse, deter them from purchasing essential mobility products altogether. For these individuals, clarity isn’t just about making a good deal – it’s about preserving their independence and quality of life.
The trade perspective: Challenges in compliance
For businesses within the mobility sector, staying compliant with DMCCA regulations is critical, but it’s not without its challenges. The VAT relief rules themselves are most certainly a grey area – for example, which products are eligible to be sold without VAT and which are not and which customers qualify and which do not.
Is the Government doing enough?
While the DMCCA sets the framework for fair marketing, the enforcement of these rules is almost non-existent. There is little doubt that HMRC are simply not doing enough to clamp down on rogue sellers who are continually breaking the rules and blatantly advertising prices without any VAT and without obtaining any customer qualification.
It is easy, on most websites, to include both VAT inclusive and exclusive prices and allow the customer to purchase with a form of online self-declaration for VAT relief. However this is most certainly not the case on digital marketplaces where only one single price is shown.
Those businesses selling without VAT in their prices are not only breaking the law they are also putting other businesses, who follow the VAT rules out of business.
What more can be done?
Addressing this issue requires more enforcement and effort:
- Clearer Pricing Online: Platforms like Google and Amazon should mandate clearer differentiation between VAT-inclusive and VAT-exempt prices and crack down on those businesses who are breaking the rules.
-
Improved Customer Education: Retailers within this sector need to prioritise educating their customers about VAT relief eligibility, perhaps through clearer website messaging or proactive customer support, for example on the phone or through face to face in-store contact.
-
Stronger Enforcement and Penalties: HMRC should be more aggressive in enforcing pricing transparency and penalising misleading practices.
-
Simplified VAT Relief Claims: Streamlining the VAT relief process could reduce the burden on both businesses and consumers, making the system more accessible for those who need it most.
Building a fairer market
Ultimately, the mobility industry has a responsibility to support those who depend on their products. Clear, honest pricing isn’t just a legal requirement – it’s a matter of respect for the customer’s dignity and financial stability. By addressing the current gaps in transparency, the sector can not only improve trust but also ensure that more people get the life-changing support they need without unnecessary financial strain.
For trade professionals following the rules this is challenging and without strong enforcement from HMRC and other Government bodies, I believe that it is an area which will lead many honest mobility businesses to fail.
Author Julia Phipps is director of Ability Superstore, an online UK retailer of mobility aids. Its website offers useful guides and advice together with a range of tried and tested products.
BHTA advice for online retailers
The British Healthcare Trades Association (BHTA) has the following advice for businesses in the mobility sector selling to disabled consumers…
Under UK laws businesses must ensure their online advertising and other marketing materials are transparent and not misleading – particularly if they are consumer-facing.
If products are typically sold to the public and are subject to VAT, the advertised price must include VAT to comply with transparency rules. Omitting VAT could be considered misleading, particularly for consumers who may struggle with complex pricing structures.
Many medical devices or mobility aids may be zero-rated for certain disabled individuals. However, vulnerable consumers may not be aware of VAT exemptions, making it essential for businesses to clearly state whether VAT applies and under what conditions a VAT-free price is available.
If targeting business customers and the majority of the customers are businesses, prices may be shown excluding VAT, but it must be explicitly stated (e.g., “+ VAT”) to avoid confusion. Ensure it is clear that it is a “trade price” or “business price”.
If advertising to both businesses and consumers, at a minimum, the advertised price must include VAT (but also make clear where there any VAT exemptions).
Currently, businesses comply with the Consumer Protection from Unfair Trading Regulations 2008.
From 6 April 2025, failure to comply with the Digital Markets Competition and Consumers Act 2024 could lead to significant penalties, including fines of up to 10 per cent of annual global turnover as well as individual penalties, compensation, and direction to change behaviour.
Ensuring VAT pricing is clearly displayed is likely a legal requirement but also a matter of ethical responsibility to protect vulnerable consumers. Given the complexities of VAT relief, businesses must take extra care in their advertising to ensure pricing transparency, accessibility, and compliance with consumer protection laws. Clear and upfront pricing helps prevent confusion, build trust, and avoid enforcement action (which is now led by the Competition and Markets Authority (CMA).
