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Hylands v Customs and Excise [2004] UKVAT V18560 (07 April 2004)

CUSTOMS DUTY – Relief – Vehicle for use by handicapped person – Motor home adapted for use by person using wheel-chair – Vehicle fitted with ramps, stowage for ramps, floor track – Whether "specially designed for the social advancement" of physically handicapped person – Yes – Reg 918/83/EEC Art 72.1, 72.2

ZERO RATING – Import of vehicle for use by handicapped person who usually uses a wheel-chair – Vehicle fitted with ramps etc – Whether vehicle "substantially and permanently adapted for carriage of a person in a wheel-chair" – Yes – VATA 1994 Sch 8, Gp 12, Items 2, 2A, Note 5L

LONDON TRIBUNAL CENTRE

QUENTIN HYLANDS Appellant

and –

THE COMMISSIONERS OF CUSTOMS AND EXCISE Respondents

Tribunal: ANGUS NICOL (Chairman)

JOANNA NEIL ACA

Sitting in public in London on 26 January 2004

The Appellant in person

Mrs S Moore, counsel, instructed by the Solicitor for the Customs and Excise, for the Respondents

© CROWN COPYRIGHT 2004

DECISION

The Appellant in this case purchased a motor home vehicle for his father, who is confined to a wheel-chair. The vehicle, a Holiday Rambler Vacationer, to which we will refer for brevity as "the Rambler") was imported in November 2002 from the United States. The Appellant made an application on 17 October 2002 for customs duty relief, stating that the Rambler had been adapted by the installation of "handicapped wheelchair ramps". The Commissioners granted a certificate for relief on 4 November 2002 on the basis that on the information provided the vehicle fell within Articles 71 to 78 of Regulation 918/83/EEC and was exempt from import duty. The Appellant also claimed relief from import VAT. According to the terms of the certificate, an import Customs officer examined the Rambler, and concluded that the vehicle did not meet the necessary conditions for relief from either customs duty or VAT. The Appellant requested reconsideration of that decision, and on 13 December 2002 the Commissioners upheld their decision. The Appellant now appeals against that decision.

While the Commissioners accepted that the Appellant's father is handicapped, and is in principle entitled to benefit from the reliefs afforded by Group 12 of Schedule 8 to the Value Added Tax Act 1994 and by Article 72 of Regulation 918/83, they contended that the vehicle did not fall within Note 5L to Item 2A of Group 12 (as regards VAT), in that the Rambler is not "substantially and permanently adapted" for the carriage of a person in a wheel-chair. Secondly, they contended that it was also not within paragraph 15.3 of Guidance Note R6-1, sections 1 and 15 (as regards customs duty), in that the adaptation was not of a "sufficiently significant and durable nature so as to make it fit for use by disabled people as intended".

The particular issue in the appeal was, whether the ramp and floor track adaptations to the Rambler were fit for the purpose of enabling a handicapped person to enter, drive, or be carried in the vehicle, given the dimensions and fitting of the ramp, and what the Commissioners termed the incomplete fittings for the floor track. A part of that issue was whether the gradient of the ramp, when in use, was such that it was suitable for use in pushing a person in a wheelchair up into the vehicle.

In his notice of appeal, the Appellant said,

"Customs and Excise have told me verbally and in an e-mail that there is no specific gradient or length of ramp required. The Customs officers have not been able to shew me any form of written guidelines to substantiate their case. The fitting of the tracks for the clamps is complete and as explained the clamps were not sent out to USA for fitting as they are too easy to remove in transit or at the docks. The information I was given before and after the import of the vehicle was misleading. The ramps were properly fitted in the USA by a reputable supplier who will supply a statement to that effect."

The law

The law relating to relief from customs duty is to be found in Articles 71 to 78 of Regulation 918/83/EEC. So far as is relevant to this appeal, that Regulation provides as follows:

"72. 1. Articles specially designed for the social advancement of physically ... handicapped persons ... shall be admitted free of import duties where they are imported ... by handicapped persons themselves for their own use....

The relief referred to in paragraph 1 shall apply to ... components or accessories specifically for the articles in question...."

It was conceded by the Commissioners that the expression "specially designed" in that Article included adaptations made to standard production items, which then made those items particularly suited to use by disabled persons.

Section 30(3) of the Value Added Tax Act 1994 ("the 1994 Act") gives relief from VAT, by zero rating, on the import of goods from a place outside the Member States if those goods fall within Schedule 8 to the 1994 Act. Relief from VAT on supplies of goods to people with disabilities are set out in Group 12 of Schedule 8, of which Items 2 and 2A are relevant in this appeal.

"2. The supply to a handicapped person for domestic or his personal use ... of—

. . .

(f) motor vehicles designed or substantially and permanently adapted for the carriage of a person in a wheelchair or on a stretcher and of no more than 11 other persons....

2A. The supply of a qualifying motor vehicle—

(a) to a handicapped person—

(i) who usually uses a wheelchair...."

A "qualifying motor vehicle" is defined in Note (5L) to Item 2A, as follows:

"A 'qualifying motor vehicle' for the purposes of Item 2A is a motor vehicle (other than a motor vehicle capable of carrying more than 12 persons including the driver)

(a) that is designed or substantially and permanently adapted to enable a handicapped person-

(i) who usually uses a wheelchair....

to enter and drive, or be otherwise carried in, the motor vehicle....

(b) that by reason of its design or being substantially and permanently adapted, includes features whose design is such that their sole purpose is to allow a wheelchair used by the handicapped person to be carried in or on the motor vehicle."

The Commissioners provide guidance to the public, in their Notice 317, as to the interpretation of Regulation 918/83/EEC, and to Customs officers in Guidance Note R6-1, sections 1 and 15. The Customs Notice 701/59 gives guidance to the public on the zero rating of the supply of motor vehicles for the disabled.

The facts

The facts are not significantly in dispute. The Appellant provided what he termed a skeleton argument, which also contained the facts upon which he relied, and to the truth of which he swore in his oral evidence. We treated it as his evidence in chief. We accepted the facts set out in it unless we indicate otherwise. He also provided a portfolio of photographs illustrating the adaptations made to the Rambler, including the ramp in use.

The Appellant's statement included an account of the dealings between himself and the Commissioners. He told us that when the Rambler was inspected by Customs officers in Southampton relief from customs duty and import VAT were declined on the grounds that the ramp was too steep, that it was not considered to be permanent, and it was not considered to be substantial. The Appellant said that he was told by a Customs officer, Mr Saunders, that a new set of guidelines relating to the criteria for acceptability of the adaptations of vehicles for disabled people had been produced. After frequent requests for a copy of these guidelines, on each occasion of which the Appellant was told that for some reason no copy was then available, but that one would be provided, the Commissioners admitted that no such guidelines existed, and the Appellant was eventually told by the Customs Helpline that there were no guidelines for access ramps to such vehicles.

The Appellant also said that he had attempted repeatedly to obtain from Customs more specific information as to the gradient of the ramp which would be considered acceptable. On one occasion he was told that the Commissioners used the Department of Transport guidelines. Those guidelines state that a gradient of 20º is acceptable for commercial vehicles. The Appellant said that he had calculated that the gradient of the ramp to the Rambler was 21º. The Commissioners, when told this, did not say whether that gradient would be acceptable, but simply said that they were guided by, but not bound by, the D of T's guidelines.

On being told that relief was refused, the Appellant said that he asked if he could, while the vehicle was held at Southampton Docks, carry out further alterations or adjustments to the adaptation which would bring the vehicle within the conditions for relief. He said that he was told categorically that relief from duty was granted only on the basis of the conversion carried out before the vehicle was imported. This, the Appellant said, was contrary to a number of cases in which this had been allowed. If it was true that further adjustments needed to be made, the Appellant said that he should have been allowed access to the vehicle for that purpose before it was imported, that is, before it had passed through Customs control. This was not permitted. He mentioned the case of a Mr Bramhill, who had been allowed to fit a ramp after import. He also referred to paragraph 3.7 of Notice 371, which states:

"3.7 Can I claim relief after the goods have been imported?

Yes. Normally, you should claim relief at the time of import. If you fail to do this, we may accept a belated claim for relief subject to certain conditions. Contact our national Advice Service for further details."

The Appellant said that the adaptations to the Rambler fulfilled the criteria set out in Notice 701/59. That publication defined "permanent" as meaning "able to be used for as long as the disabled wheelchair user requires it", and added that "generally the adaptation would require welding or bolting to the vehicle". The Appellant said that the ramp was strong, solid, and firm enough to take his father and a member of the family pushing him in a wheelchair up the ramp. Without the ramp he could not enter the Rambler unless carried. The ramps are bolted to the floor of the Rambler, and provide access to the vehicle for as long as the Appellant's father may require it. The photographs shew the Appellant pushing the wheelchair up the ramp. As a result, the Appellant's father is able to go to places which he would otherwise not be able to visit, which helps towards his "social advancement" as required in Article 72 of Regulation 918/83/EEC. The photographs also clearly illustrate the angle at which the ramp enters the Rambler, and the method of securing both the ramp inside the Rambler and the positioning and holding in place of the wheel-chair.

The Appellant told us that the ramps are fitted to the floor of the Rambler with four bolts, in the same way as the driver's seat - which is a permanent fitting. The Commissioners say that the fitting could be removed, and the Appellant said that to do so would take about the same length of time as removing the driver's seat. There were some very minor problems, the Appellant said. A bolt had gone missing from one of the ramps; it was replaceable in seconds. The ramp could, in any case, still be used without it, and Customs officers were able to deploy the ramps without it. It was replaced on arrival at East Coast Leisure (where it was taken for electrical adaptation) on the day of arrival in the United Kingdom. Also missing was a means of securing the ramps while the vehicle was in motion. The Appellant said that he had been assured that it had been fitted, though it was not there on delivery, but there was reason to believe that it had been there on arrival in the United Kingdom. In any case, it was very simple to fix. Also not there on arrival were the clamps for fixing the wheel-chair to the track. They had been kept out of the vehicle, since the Appellant had been warned that they were very liable to theft, which the Customs officers did not appear to understand. Also missing on arrival was the securing device. This is not essential to safety, and is simply fitted for tidiness, to make the ramps stand upright rather than lying on the floor. At the time of the inspection of the Rambler there was a three-inch gap at the top of the rams. This would never have been a hazard or a snag, since the smallest wheel that would have to cross it was of 150 mm diameter. The gap has in fact been filled.

Photograph 17 shewed the Appellant wheeling his father up the ramp. He said that his father is a small light man, and he had no difficulty wheeling him up the ramp, nor had any of his three brothers and his brother-in-law. The ramps had been bought second-hand for £120, which was a bargain as they normally cost £500; there was also the cost of sending them to America. Finally, the Appellant said that the reason for buying the Rambler was that it was the most suitable for a disabled person and needed little modification.

Mr Nigel Usher is a director of East Coast Leisure, in Basildon, a company which specialises in the import and conversion of American motorhomes. His firm is an agent of Lazydays of Tampa, Florida, the purveyor of the Rambler. He said that he had advised the Appellant on the type of conversion that had been acceptable to Customs on previous imports. There was nothing, he said, about the conversion of the Rambler which was different from that which had been accepted on previous imports, and the conversion was carried out by the same staff to the same standard as previously. It had been suggested by Customs that the conversion was incomplete and that the ramp was not properly fitted. Mr Usher said that he had been assured by Lazydays that when it had left the United States it had been complete and in good order. The clamps to hold the wheel-chair to the floor tracks were not in the vehicle when it arrived, because Mr Usher had himself advised the Appellant not to send them since they were loose components that had been known to go missing in previous imports.

Mr Usher said that he collected the Rambler from the docks and examined the ramps. He found that the clamp which holds the ramps in position while travelling was missing, as was a self tapping bolt from the top of the ramp. He checked with Lazydays and spoke to a senior salesman who saw the vehicle prior to it being driven to the docks, who informed him that the clamps and the bolt were all there when the vehicle left Florida. Mr Usher said that it took a matter of seconds to replace the bolt. He gave the view that the ramps fitted to the Rambler were more substantial and permanent than the type which hook on to a rail at the top of the steps and are packed away in a locker when not in use: he had seen that type fitted by other importers, and they had been accepted by Customs.

He said that it would take three minutes to remove the driver's seat, if that had to be done, and that was considered to be a permanent fitting. Permanent, to him, meant something that was either bolted or welded in place. Lazydays had fitted the ramps in their normal way; it was done to United States standards, which, he said, are a good deal stricter than those in the United Kingdom. The design was one which was often used in America, and was not considered there to be unsafe.

Mr Steve Preston, a senior assurance officer of Customs and Excise, reviewed the decision to withhold relief. On 21 November 2002 he examined the Rambler at Southampton Docks. He said that the only adaptations apparent were two sets of tracking set in the floor of the vehicle and a three-section ramp. The ramp was 111 inches long, and the entrance to the vehicle was 47 inches from the ground at the point where the ramps were fixed. His opinion was that that resulted in far too steep an incline to provide a "viable" method of wheel-chair access. He said that he had had difficulty in ascending the ramp, and did not think that he would have been able to push a laden wheel-chair up "such a sheer gradient". He went on to say that the attachment of the ramp to the head of the entry steps appeared to be of a temporary nature and was insecurely fitted, the bracket securing one side of the ramp having only one of the two bolts required. There was also, he said, a dangerous gap of several inches between the top of the ramp and the floor of the vehicle.

Mr Preston said that he had considered the law on the subject. Although the terms "permanent" and "substantial" were not defined, Notice 701/59 expanded upon the type of modification that "would be deemed to be acceptable". Again, "specially designed" and "social advancement" were not defined. He consulted the Customs and Excise Charities and Health care Team, who provided guidance as to adaptations and also as to acceptable gradients of ramps As a result, he concluded that the adaptations would not enable a wheel-chair user to use the vehicle safely or to gain access to it safely, and the adaptations were not permanent or substantial.

Mr Preston said that according to his inspection notes there was no device for securing the ramp when it was not in use. When he saw the ramp it was, he said, laid down, possibly on the floor. He said that there was a thing which could possibly have been so used: he did not think about it in depth. He said, in cross-examination that he had considerable experience of getting people in wheel-chairs up steps, but not up ramps. He said that what he termed the "base plate" (shewn in photograph 11) was loose, and it would only be a question of time before it came away. He said that the ramp was not appropriate, nor was the gradient, and the ramp had an air of impermanence. He agreed that the play in the fitting was not inherent and was readily curable. He said that the workmanship was such that the adaptation could easily fall to pieces. He believed that the adaptation had been made with the intention of obtaining relief: then he added that he was not suggesting that that was the Appellant's intention, but that was the appearance. Some such vehicles, he said, do become "unmodified"; that had not happened in this case and he had no reason to suppose that it would.

The Commissioners' contentions

Mrs Moore, for the Commissioners, began by stating that the question to de decided was, whether the Rambler, at the time of import, had been substantially and permanently adapted. It was the Commissioners' case that it had not, and was also actually unfit for the purpose intended. The adaptation should not be regarded as substantial; it had not made any significant difference to Mr Hylands's ability to use the vehicle. The normal gradient for a ramp was 1 : 12. The Public Service Accessibility Regulations 2000 (1970/2000) refer to an angle of 7º when beside a 125 mm kerb, or 20º when both vehicle and the outer end of the ramp are on the same surface. Here the angle was 21º to a kerb of 180 mm. On a level surface it would be 1: 2.14. If it was 20º with the box (substituting for a kerb), with no kerb it would be somewhat steeper. [Here the Appellant interposed to point out that it was 21º on the kerb, and on a level surface was no more than 1º or 2º steeper.]

The gap at the top of the ramp was another factor which made the adaptation unsuitable. The adaptation was not substantial, in that it was not sturdy or firmly constructed. There had been a bolt missing, and the securing clip was loose, giving a degree of play that was more than what was acceptable. Looked at in the round, the adaptation was not substantial or permanent. There was also a danger of relief being granted in respect of adaptations which are easily removed.

The Appellant's contentions

The Appellant said that the matter of the permissible gradient was purely hypothetical, since this was a private vehicle, and the regulations applied only to public service vehicles. The missing bolt was the kind of fault that would normally be picked up on the predelivery inspection. He stressed again that, in the circumstances as they were, the adaptation was substantial, and was permanent. The word "permanent" was defined in Notice 701/59 as "able to be used for as long as the disabled wheel-chair user requires it", and said that "generally the adaptation would require welding or bolting to the vehicle". This adaptation satisfied both criteria, in that it was bolted to the vehicle and would last as long as his father needed it, and that there was no difficulty in using it. Notice 701/59 also defined "substantial" as referring to an adaptation which enables a wheel-chair user to use a vehicle which he could not use before it was adapted. That criterion was also satisfied. The evidence, including the photographs, shewed that the ramps allow the wheel-chair user to use a vehicle which he could not have used before the adaptation; the ramps were bolted to the floor, and will be a means of access for as long as the Appellant's father needs them; and the ramp is a safe access to the vehicle for the wheel-chair user. Finally, it allows the Appellant's father to go to places which he would otherwise be unable to visit, thereby helping towards his social advancement.

Conclusions

There was a certain amount of common ground between the Appellant and the Commissioners. It was conceded by the Commissioners that the Appellant's father is disabled and requires the use of a wheel-chair in order to be mobile, and that he is in principle entitled to relief in respect of supplies to disabled persons under Group 12 of Schedule 8 to the 1994 Act and under Article 72 of Regulation 918/83/EEC. It was further conceded that the expression "specially designed" in Article 72 includes adaptations made to standard production items which then make those items particularly suited for use by a disabled person. The issue which this Tribunal has to decide, therefore, is whether the Rambler is a motor vehicle substantially and permanently adapted for the carriage of a person in a wheel-chair and of no more than eleven other persons. The key words are "substantially" and "permanently", though the case was argued by the Commissioners also on the basis that other criteria were safety and suitability, words which do not appear in either the European or the domestic legislation. No doubt the reasoning was that, by implication, a disabled person who uses a wheel-chair was not enabled to use the vehicle if it was unsuitable or not safe.

The legislation gives no definition of either "substantial" or "permanent". However, Notice 701/59 sets out what the Commissioners understand those tow words to mean:

"3.3 What is a 'permanent' adaptation?

An adaptation is permanent if it can be used for as long as the disabled wheel-chair user requires it. Generally the adaptation would require welding or bolting to the vehicle.

4 What is a 'substantial' adaptation?

A substantial adaptation enables a wheel-chair user to use a vehicle which he could not use before it was adapted...."

We therefore ask ourselves whether the adaptations carried out to the Rambler fell within those definitions.

The Appellant's evidence, which was significantly supported by the photographs, we found to be helpful. In view of the observations and evidence of Mr Preston, particularly as to whether the ramp could be used with ease and safety by a person pushing another in a wheel-chair, we had to consider, first, whether the Appellant was a witness upon whose evidence we could rely. He said that he had no difficulty in pushing his father in a wheel-chair up the ramp, whereas Mr Preston said that he would find it very difficult to do so, and that his colleagues refused to walk up the ramp because it was of a temporary nature and liable to come away at any time. Having observed the Appellant giving evidence and conducting his case, we came to the conclusion that he was a witness of truth. We therefore accepted his evidence on all points where it differed from that of Mr Preston. In any event, we did not accept from Mr Preston his criticisms of the adaptations as being unsafe, temporary in nature, and of poor workmanship on the basis of minor defects that could be made right easily and within a matter of moments. We reject his belief that the adaptation was made for the purpose of obtaining relief from duty, a point upon which he contradicted himself.

First, was the adaptation permanent? The evidence shewed clearly that it consisted of a large piece of equipment, the ramps, which were capable of being put in place with reasonable ease to allow the wheel-chair to be pushed up into the vehicle, and of being dismantled and stowed conveniently and tidily within the vehicle. The ramps turned on a swivel from the operative position to their storage. The top mounting of the ramp was bolted to the floor of the vehicle, and it swivelled on another part of the mounting also bolted to the floor. There was also a mounting on the floor of the vehicle to take the wheels of the wheel-chair, which were then clamped in position when the vehicle was moving. This mounting was either bolted or welded to the floor. It appeared to us that the adaptations were certainly capable of being used for so long as the Appellant's father would require them.

Was the adaptation substantial? The nature of the adaptation, described above, relying upon the Appellant's evidence and that of the photographs, did not appear to us to be of a temporary nature or to be composed of materials such that they could be unadapted at short notice. Whether the adaptation took up a lot of the interior space of the Rambler or not appears to us to be of no importance. One seat in the vehicle had been removed to make room for the wheel-chair. But the important thing, according to the definition in Notice 701/59, is whether it enabled the wheel-chair user to use the vehicle. It seemed clear to us that without the ramp the Appellant's father would be unable to enter the Rambler, and without the floor mounting for the wheel-chair he would be unable safely to be transported in it. That alone is enough to satisfy the definition of substantial in Notice 701/59.

However, it is in this context that the matters of suitability, safety and gradient arise, and also the point taken by Mrs Moore, that the adaptation did not make any significant difference to the ability of the Appellant's father to use the vehicle. It was not the Commissioners' case that the photographs shewed anything other than the adaptations as they are and were at the time of import. They shewed what appeared to us to be strong metal fittings, obviously bolted to the floor of the vehicle. They did not appear to be insecurely constructed. We disregard the trivial and easily remedied defects such as a missing bolt. Mrs Moore said that a securing clip was loose with more than an acceptable degree of play, but there was no evidence of that, and in any event it would, in our view, fall within what Mr Usher described as the kind of thing that would be picked up and remedied on a predelivery inspection.

As to the gradient, there was a lot of discussion as to what was an acceptable gradient, and the Commissioners relied upon the Department of Transport regulations. Those, it was common ground, do not apply to private vehicles. It is also the case that those guidelines were not, as we were told, even in force at the time of the import of the Rambler. However, if it is argued that a particular gradient is unsafe, or renders the ramps unusable, then it would seem that the D o T's notions of what is safe for public service vehicles is at least of some relevance, and so we take it into consideration: it is a reference point, as Mr Preston termed it, though no more than that. The evidence of the Appellant was that the gradient of the ramps was 21º when loading from a kerb, and perhaps another 1º or 2º when loading from level ground. That, said the Commissioners, was too steep, the D o T ruling being that 20º was appropriate. Mr Preston described the gradient as "sheer", which appeared to us to be considerable exaggeration. We were surprised that Mr Preston did not think that he could wheel a wheel-chair up such a slope. The fact remains that the Appellant, whose evidence we accepted on this point, and which was, in fact, unchallenged, said that he had no trouble doing so. We therefore conclude that, while the D o T regulations may provide a guideline for such matters, the evidence of the person actually using the adaptations is far more cogent. Mr Preston's evidence on the point was subjective and theoretical, since he had not tried wheeling a wheel-chair up the ramp, and therefore contrasts with the evidence of the actual user, who had. If the Appellant is able without difficulty to wheel his father up the ramp, at an angle of about 21º, that certainly satisfies paragraph 3.4 of Notice 701/59, in that the adaptation, specifically the ramp, enables the wheel-chair user to use the vehicle, which he could not have used before it had been adapted.

Those definitions may not have the force of law in that they are not statutory definitions. But in our judgment the fulfilling of such criteria is enough to satisfy the requirements of Items 2 and 2A and Note 5L of Group 12 of Schedule 8 to the 1994 Act, and also Article 72 of Regulation 918/83.

For the above reasons, this appeal is allowed. No application was made at the hearing for costs. In case either party should wish to be heard on costs, or in default of agreement, we give liberty to both parties to apply as to costs. Any such application should be made not later than 30 days after the date of release of this decision.

ANGUS NICOL

CHAIRMAN

RELEASED:

LON/03/0050