VAT zero rating of transport of disabled passengers

HMRC has published Revenue and Customs Brief 3 (2019): VAT Zero-rating of transport of disabled passengers. The brief clarifies that HMRC’s policy on the scope of the VAT zero rate for transport services has not changed following the Upper Tribunal decision in Jigsaw Medical Services Limited (2018) UKUT 0222.


The Jigsaw case considered whether transport in certain types of ‘blue light’ emergency ambulances was zero rated for VAT. The Upper Tribunal decided that it was not zero rated.

The decision at paragraph 2(2) states it was ‘common ground’ that ‘patient transport ambulance services are both exempt and zero-rated’. This has prompted some transport providers to seek clarification of HMRC’s policy. This comment needs to be read in the context of the rest of the decision and the legal tests. It was not referring to all patient transport ambulance services.

HMRC’s policy

The supply of transport services for sick or injured persons in vehicles specially designed for that purpose is an exempt supply for VAT purposes.

The supply of passenger transport is zero rated if the vehicle used meets certain seating criteria. The supply of transport in any vehicle with seating to carry 10 or more passengers (including the driver) is a zero-rated supply.

Where a vehicle is designed or adapted to safely carry one or more persons in a wheelchair and, if it were not for those changes alone, the vehicle would seat 10 or more passengers, it is a zero-rated supply.

It is possible for a vehicle designed to carry sick or injured persons to also meet the seating criteria. The transport of sick or injured people in such a vehicle would therefore meet the criteria for both VAT exemption and zero rating. In these cases the zero rate would take precedence. Not all vehicles designed to carry sick or injured people will meet the seating criteria, so transport of passengers in these vehicles is not zero rated.

How to decide if a vehicle can carry 10 or more people

This must be considered by reference to the actual and anticipated ways in which the vehicle is or will be used. Simply demonstrating that 10 seats can fit in a vehicle is insufficient to apply the zero-rating. To meet the seating criteria, the seats must also be usable in a sensible way and in acceptable circumstances. The vehicle must meet the seating criteria at the time the supply of transport takes place.

Sensible and acceptable circumstances include:

  • complying with legal requirements concerning design, construction and operation of vehicles to ensure the safe transport of the passengers in the vehicle
  • passengers must be able to safely access and use all the seats without being impeded by fittings and fixtures

Adapted vehicles

The zero-rate includes the transport of passengers in a vehicle designed or substantially and permanently adapted for the safe carriage of a person in a wheelchair or, 2 or more such persons and which, if it were not so designed or adapted would be capable of carrying no less than 10 persons.

The adaptions for wheelchairs rule allows transport, in vehicles that otherwise would have 10 seats, to be zero rated. Transport in a vehicle with less than 10 seats is not intended to be zero rated on the basis that the vehicle could be redesigned to have at least 10 seats.

The Jigsaw decision sets out the following approach:

  1. Identify what was done to the vehicle to design it or adapt it for the safe carriage of a person in a wheelchair.
  2. If the wheelchair modifications were not made, what extra passenger capacity could be added?

What is not allowed, is to presume what other changes could be made to increase the number of seats. That is inconsistent with the rule that looks at the vehicle as it is and how the vehicle is being used.

The following will assist in applying the tests for zero rating.

Does the vehicle have 10 or more seats that are safe to use at the same time? If so, transport in that vehicle is zero rated.

If not, does the vehicle have wheelchair modifications? If ’No’, the transport will be standard rated unless the exemption for the transport of sick or injured persons applies.

If ‘Yes’ then, without the wheelchair modifications, how many notional seats would occupy the resultant space? Then, does the number of actual seats plus these notional seats equal 10 or more that can be safely used at the same time? If so, transport in that vehicle is zero rated.