VAT on motorcycle helmets
Motorcycle helmets as well as protective boots and helmets for industrial use and cycle helmets are charged a zero rate of VAT. This note discusses the scope of this VAT relief and the concerns there have been that it might have to be withdrawn under EC proposals for harmonising VAT rates.
Protective helmets for wear by someone driving or riding a motor cycle are charged a zero rate of VAT. This zero rate extends to protective boots and helmets for industrial use and pedal cycle helmets. Detailed guidance on the scope of the zero rate is published by HM Revenue & Customs. In July 2003 the European Commission published proposals to simplify the EU rules on VAT rates, which, if adopted, would have meant the abolition of this zero rate. Any amendment to these rules – as with any VAT directive – must agreed unanimously between the Member States, and the Commission’s proposals were strongly opposed by the UK Government and several other countries. After a period of deadlock an agreement was finally reached in February 2006: a minimalist package that allowed for existing reduced and zero rates to continue. Since then these rules have remained unchanged, bar the addition of two minor items to the list of goods and services which Member States may, if they wish, apply a reduced rate.