VAT Exemption for Mobile Phone

[Deleted User] · 23 June 2012 at 6:31PM

I read that some mobile phones are eligible for VAT exemption. I looked at the HMRC website (VAT NOTICE 701/7 – VAT RELIEF) and it looks as if I qualify. HMRC say that they do not refund VAT - the supplier provides the item free of VAT when the customer completes the appropriate form at the time of purchase. I downloaded the form and, as I am with Orange PAYG at present, I asked them about a phone which (I am told via the website) is eligible for the exemption.

Orange did not seem to know anything about it and said I should buy the phone and claim the VAT back afterwards. HMRC say this is not so. For my needs I think Doro Easy 610 PAYG from Orange would be very suitable for me - the Orange shop is local to me and they would set it up etc.

The problem is that they don't know about the VAT exemption at the point of purchase. If anyone has information I'll be grateful, thank you. (I'll also post this on the Mobile Phone forum in case it's also appropriate there.)

Richie-from-the-Boro · 23 June 2012 at 7:07PM

- you will never ever get a retrospective refund from HMRC
- if you can get a mobile phone supplier to deduct VAT before you pay, best of luck
- the Orange shop local to you is selling you a phone with VAT, you will never get VAT back later
- read this recent thread and the best of luck my friend

System · 23 June 2012 at 7:37PM

I can't see anything in the notice that covers mobile phones.

[Deleted User] · 23 June 2012 at 7:40PM

Richie-from-the-Boro wrote: »

- you will never ever get a retrospective refund from HMRC
- if you can get a mobile phone supplier to deduct VAT before you pay, best of luck
- the Orange shop local to you is selling you a phone with VAT, you will never get VAT back later
- read this recent thread and the best of luck my friend

Thank you Richie-from-the-Boro. It was an interesting thread and really helpful - much appreciated.

[Deleted User] · 23 June 2012 at 7:45PM

!!!!!! wrote: »

I can't see anything in the notice that covers mobile phones.

This is where I found the link, !!!!!!: From Future Senior: “This item is suitable for ZERO rating of VAT. If you wish to declare that you are an eligible person you can select YES from the box below. You must confirm that you are making a TRUE declaration (from the second box) in accordance with VAT notice 701/7 August 2002 Relief's for Disabled People. Without a True declaration your order will be processed at the standard rate.”

From what I could see I would be able to make a truthful declaration as being an eligible person.

It seems to be a bit irrelevant from the Orange point of view. I've always had an Orange PAYG mobile and, as I'm not at all good with technology, I thought I'd best stay with Orange. Maybe I'll have to look at other providers. I had not heard of "Future Senior" before but they seem to know about the VAT exemption.

If you have any comments I'll be very interested, thank you as this is all new to me. Unfortunately my last hospital visit confirmed that my hearing in both ears is deteriorating and I'm really struggling with my present mobile.

[Deleted User] · 23 June 2012 at 8:42PM

if you shop around on the internet you can get some really good contract deals that offer upto £150 cash back after around 6 months,so e.g free phone with 300 minutes and 300 text per month for £15 then £150back,making an 18 month contract just £120 or around £7 a month in total,and if you chose t mobile you can get unlimited 01 02 and 03 numbers for free

[Deleted User] · 23 June 2012 at 9:11PM

That is really very helpful, thank you woodbine, and I'll look into it.

JasonLVC · 23 June 2012 at 10:01PM

Deleted_User wrote: »

This is where I found the link, !!!!!!: From Future Senior: “This item is suitable for ZERO rating of VAT. If you wish to declare that you are an eligible person you can select YES from the box below. You must confirm that you are making a TRUE declaration (from the second box) in accordance withVAT notice 701/7 August 2002 Relief's for Disabled People. Without a True declaration your order will be processed at the standard rate.”

From what I could see I would be able to make a truthful declaration as being an eligible person.

It seems to be a bit irrelevant from the Orange point of view. I've always had an Orange PAYG mobile and, as I'm not at all good with technology, I thought I'd best stay with Orange. Maybe I'll have to look at other providers. I had not heard of "Future Senior" before but they seem to know about the VAT exemption.

If you have any comments I'll be very interested, thank you as this is all new to me. Unfortunately my last hospital visit confirmed that my hearing in both ears is deteriorating and I'm really struggling with my present mobile.

The link from the website you read from is a little mis-leading, causing your confusion.

The zero rating applies only to specific goods which are designed SOLELY for diabled persons.

So if your mobile phone is designed ONLY for use by disabled people and not held out for sale to able-bodied people then the zero rating will apply, but if you've got an phone which anyone else can buy then the exemption will not apply.

What phone do you have, make/model is it a special one designed for disabled people? Big button or hearing aid compatible may be eligible but an iphone will not be.

The HMRC Notice 701 http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageImport_ShowContent&id=HMCE_CL_000184&propertyType=document#P53_4013 at para. 4.5 talks about eligibility for 'stuff' explains precisley what it means when it says the zero rate only applies to goods "solely designed" for the disabled. Its not so much about YOUR disability and more about whether the thing you buy is designed and held out specifically for sale to disabled people.

For example, a commode(!) is held out for sale to disabled people and only disabled people (usually) need them and is zero rated, whereas a caravan portaloo can be used by anyone and is not zero rated.

Sorry that isn't the answer you were looking for, Woodbine has a good suggestion for you, but hopefully you can understand why Orange were being unhelpful, its becuase the exemption is unlikely to apply unless your phone is special.

Any other queries then do post/let me know and I'll try and help.

Edit. Just looked at the phone from the website link and it appears to be specially designed for older people with vision/hearing problems so will likely be zero rated. The zero rate exemption requires you to complete the declaration and the seller will sell without the VAT. The mechanism does not allow you to be charged VAT and then claim it back elsewhere, the scheme only works by you not being charged VAT in the first place, so if the website are willing to sell to you VAT free, then tick the boxes and the problem is theirs, not yours if the phone has been exempted by them in error.

Richie-from-the-Boro · 23 June 2012 at 10:20PM

I've just processed a mobile [Doro PhoneEasy 605] on the site you link to and answered the questions correctly to claim the VAT off discount the checkout basket says :

£76:00
£12:67 less VAT
£66:33 sub total
£03:00 postage
£66:33 grand total

- so it seems to be the case that its nothing more than a single range of cheap mobiles
- and the company takes the 20% off as a discount
- for example the Doro PhoneEasy 615 is about £100 elsewhere
- futuresenior charge £142 less the 20% .. .. so still a good profit margin

NOTE: Doro is one manufacturer of the worlds largest range of easy to use mobile phones

[Deleted User] · 24 June 2012 at 10:15AM

JasonLVC wrote: »

The link from the website you read from is a little mis-leading, causing your confusion.

The zero rating applies only to specific goods which are designed SOLELY for diabled persons.

So if your mobile phone is designed ONLY for use by disabled people and not held out for sale to able-bodied people then the zero rating will apply, but if you've got an phone which anyone else can buy then the exemption will not apply.

What phone do you have, make/model is it a special one designed for disabled people? Big button or hearing aid compatible may be eligible but an iphone will not be.

The HMRC Notice 701 http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageImport_ShowContent&id=HMCE_CL_000184&propertyType=document#P53_4013 at para. 4.5 talks about eligibility for 'stuff' explains precisley what it means when it says the zero rate only applies to goods "solely designed" for the disabled. Its not so much about YOUR disability and more about whether the thing you buy is designed and held out specifically for sale to disabled people.

For example, a commode(!) is held out for sale to disabled people and only disabled people (usually) need them and is zero rated, whereas a caravan portaloo can be used by anyone and is not zero rated.

Sorry that isn't the answer you were looking for, Woodbine has a good suggestion for you, but hopefully you can understand why Orange were being unhelpful, its becuase the exemption is unlikely to apply unless your phone is special.

Any other queries then do post/let me know and I'll try and help.

Edit. Just looked at the phone from the website link and it appears to be specially designed for older people with vision/hearing problems so will likely be zero rated. The zero rate exemption requires you to complete the declaration and the seller will sell without the VAT. The mechanism does not allow you to be charged VAT and then claim it back elsewhere, the scheme only works by you not being charged VAT in the first place, so if the website are willing to sell to you VAT free, then tick the boxes and the problem is theirs, not yours if the phone has been exempted by them in error.

Thank you very much, JasonLVC. It's a really comprehensive reply and is so helpful. The Orange 'phone is a Doro Easy610. I won't go into detail but as well as hearing loss I have other health issues and this seemed a good 'phone for me.

Richie and woodbine have, as you see, also given great information and I'll do some more homework before buying. Of course the price is important but my main hope is to find a mobile I can actually hear.

You're all great in giving time and expertise to this for me. Thank you again.

Crimson

Richie-from-the-Boro · 24 June 2012 at 11:56AM

- the CL8400 can be had for about £60:00 it rings @ 80dB and has a speaker volume @ 40dB
- an extra tenner will get you the 'clamshell' version
- you can get it as pay-as-you-go or contract phone but not on Orange and not on '3' network
- if you later need a hearing aid its fully compatible with modern hearing aids

VAT Exemption for Mobile Phone

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