§ Baroness Jegerasked Her Majesty's Government:
Whether it is their intention that VAT should be charged on building improvements and extensions carried out for the benefit of handicapped people, whether in their own or in rented accommodation.
§ The Chancellor of the Duchy of Lancaster (Lord Cockfield)The Government have been considering the impact on the handicapped of the decision702WA announced in the Budget to tax building alterations from 1 st June, since alterations to buildings to suit the condition of a handicapped person will no longer enjoy zero-rating under the general relief for construction, but nor do they qualify at present under the relief for aids for the handicapped contained in Group 14 to the Zero Rate Schedule of the Value Added Tax Act 1983. It has therefore been decided to widen Items 3 and 4 of this group by means of a Treasury order which will be made and laid shortly, and which will come into operation on 1st June. The effect of the order will be to allow relief to services supplied either to an individual person, or to a charity, which facilitate entry to or movement within any building by a handicapped person, for example the construction of ramps and the widening of doorways and passages. There will also be a specific provision zero-rating the first time installation on the ground floor of a bathroom, washroom or lavatory specifically needed to suit the needs of a handicapped person, provided the building is used wholly as a private residence. This relief will be available to handicapped tenants as well as to owner occupiers. This relief will continue to provide zero-rating for alterations which are very important for the handicapped, but the Government recognise that by no means all construction for or on behalf of the handicapped will be covered. However, the Government do not consider that a wider relief preserving the exact pre-Budget position would be justified.