Zero rating young children's clothing and footwear

HMRC Reference:Notice 714 (June 2011) View Change History
 

Contents

Foreword

1. Zero rating young children’s clothing and footwear

1.1 What is this notice about?

1.2 What has changed?

1.3 Who should read it?

1.4 What are the conditions for zero rating?

1.5 How do I decide whether all the conditions are met?

2. Articles of clothing or footwear

2.1 Is it an article of clothing or footwear?

2.2 Articles of clothing

2.3 Articles of footwear

3. Items made of fur

3.1 Is it made of fur?

4. Items designed for young children

4.1 Is it designed for young children?

4.2 Clothing

4.3 Footwear

4.4 Hats and other headgear

4.5 Belts, braces and other items

5. Items suitable only for young children

5.1 Is it suitable only for young children?

5.2 What does “held out for sale” mean?

5.3 Zero rating by manufacturers

5.4 Zero rating by wholesalers and distributors

5.5 Zero rating by mail order and internet suppliers

5.6 Zero rating by retailers

5.7 Impact on retail scheme calculations

6. Uniforms

6.1 What about uniforms for school and children's organisations?

7. Cloth kits

7.1 Can I zero rate packaged kits for making children’s clothes?

8. Mixed supplies

8.1 What about mixed supplies?

9. Services

9.1 Cut, make and trim

9.2 Alteration, repair, embroidery and similar services

9.3 Hire or loan of children’s clothing and footwear

Your rights and obligations

Do you have any comments or suggestions?

Putting things right

How we use your information

 

Foreword

This notice cancels and replaces the January 2002 edition of Notice 714.

1. Zero rating young children’s clothing and footwear

1.1 What is this notice about?

This notice explains when supplies of children’s clothing and footwear can be zero-rated.

1.2 What has changed?

This notice clarifies:

  • The scope of the term "fur skin" - see paragraph 3.1;
  • the eligibility of fur-lined headgear for zero rating -see paragraph 3.1;
  • the fact that collars and cuffs can be zero rated - see paragraph 4.5;
  • the VAT position on items of clothing for children's organisations- see paragraph 6.1.

1.3 Who should read it?

It is intended for those who design, manufacture and sell, either as wholesaler or retailer, items of children’s clothing.

1.4 What are the conditions for zero rating?

You may zero-rate your supply when all of the following four conditions are met:

  • it must be an article of clothing or footwear;
  • it must not be made of fur;
  • it must be designed for young children, and
  • it must only be suitable for young children.

1.5 How do I decide whether all the conditions are met?

The best way is to consider them one at a time as follows:

Step


Ask yourself…


This section will help you decide


1


Is it an article of clothing or footwear?


2


2


Is it made of fur?


3


3


Is it designed for young children?


4


4


Is it suitable only for young children?


5


2. Articles of clothing or footwear

2.1 Is it an article of clothing or footwear?

This is the first question you must answer. If the item is not an article of clothing or footwear it is standard-rated. If, having read the following section, you are satisfied that the item is an article of clothing or footwear you must also consider the other steps in paragraph 1.4 before you can zero rate the article.

2.2 Articles of clothing

As well as all the obvious garments, “articles of clothing” include items such as hats, caps, braces, belts, garters and scarves. It also includes items that, although primarily designed as safety aids, such as cyclists’ tabards or sailors’ lifejackets, still have the form and function of clothing.

Articles of clothing do not include clothing accessories and items of haberdashery sold separately, or safety accessories which are not themselves clothing, such as:

  • reflective arm bands or buoyancy aids;
  • fastenings such as buckles, buttons and zips;
  • badges, patches and other sew-on or iron-on items, and
  • hand muffs and ear muffs.

Also see paragraph 4.5.

2.2.1 Baby clothing

Most items of baby wear, such as bonnets, bootees and matinee jackets, can be clearly recognised as clothing, but the following less obvious items are also considered to be articles of clothing:

  • bibs, including plastic bibs with a curved tray at the base;
  • hooded rain covers for pushchairs, provided they are suitable for the baby to wear as a rain cape when out of the pushchair;
  • nappies (and nappy liners), both disposable and re-usable, provided they are held out for sale appropriately;
  • babies’ shawls, provided they are designed and held out as such;
  • padded sleeping garments, similar in construction to sleeping bags, but shaped at the neck and armholes or having sleeves and/or legs, and
  • towelling bathrobes designed with a hood or sleeves enabling the baby to be wrapped in them as a garment.

However, the following are not considered to be clothing and are standard-rated:

  • pram and pushchair covers not designed to serve as rain capes outside the pram or chair;
  • disposable nappy material sold in a continuous role from which individual nappies are cut;
  • “mother-and-baby” shawls intended to wrap around both mother and child and;
  • sleeping bags not designed with neck and arm holes or sleeves and/or legs.

2.3 Articles of footwear

Articles of footwear include:

  • boots, shoes, sandals and slippers, even if they are designed for special purposes (such as ballet shoes or studded football boots), and
  • ice-skating or roller-skating boots, with or without skating blades or rollers attached.

But not:

  • blades or rollers sold on their own, or platform type roller skates for attaching to normal shoes, and
  • shoelaces, insoles, heel protectors and stick-on soles sold as separate items.

3. Items made of fur

3.1 Is it made of fur?

You must standard rate any articles made wholly or partly of fur skin - that is any skin with fur, hair or wool attached.

Subject to the other tests at paragraph 1.4, you may zero rate:

  • articles made using artificial fur;
  • clothing made of rabbit skin, or sheep or lamb skin;
  • articles made from the skin, if neither tanned nor dressed, of bovine cattle (including buffalo), equine animals, goats or kids (other than Yemen, Mongolian and Tibetan goats or kids), swine (including peccary ), chamois, gazelles, deer or dogs;
  • fur and fur-lined headgear, belts, gloves and footwear;
  • articles only trimmed with fur - unless the area of the trim is more than one fifth of the surface area or, if the garment is new, the cost to the manufacturer of the trimming is more than the cost of the material of the garment, and
  • fur lined boots.

4. Items designed for young children

4.1 Is it designed for young children?

After you have decided that the item is an article of clothing or footwear, and that it is not made of fur, you must then decide whether or not the item is designed for young children. This will normally be done either on the basis of the item’s physical measurement or on the body size of the child it is intended to fit. But remember, before the garments can be zero-rated you must also satisfy the other conditions in paragraph 1.4.

4.2 Clothing

We will accept that garments are designed for young children provided they are at or within the tabled measurements below. These measurements are based on children up to the eve of their 14th birthday, as this is when the body dimensions begin to merge with those of the general adult population.

The garments should be measured on a flat surface, with creases smoothed out, buttons (or equivalent) fastened and any intended overlap in place. Chest measurements should normally be taken 2.5 cms (1”) below the base of the armhole and multiplied by two. Similarly, waist measurements should be taken from one side of the fastened waistband to the other and multiplied by two.

Boys

Garment


Chest


Waist


Shirts


104cms


41’’


   

Knitwear


104cms


41’’


   

Jackets, waistcoats


109cms


43’’


   

Top coats, outerwear


114cms


44.5’’


   

Dresses


       

Skirts*


       

Trousers, shorts*


   

72cms


28.5’’


Underwear, swimwear


88cms


34.5’’


72cms


28.5’’


Nightwear


105cms


41.5’’


73cms


29’’


Girls

Garment


Chest


Waist


Shirts


105cms


41.5’’


   

Knitwear


105cms


41.5’’


   

Jackets, waistcoats


110cms


43.5’’


   

Top coats, outerwear


115cms


45’’


   

Dresses


98cms


39.5’’


   

Skirts*


   

71cms


28’’


Trousers, shorts*


   

71cms


28’’


Underwear, swimwear


89cms


35’’


71cms


28’’


Nightwear


106cms


42’’


72cms


28.5’’


(* Those garments with elasticated waistbands should be measured at their full stretch. Those that have no fastening may be zero-rated up to a maximum stretched waist of 85 cms (33½”) for boys and 90 cms (35½”) for girls.)

Some products are normally judged by different criteria or measurements. The following garments are also accepted as being designed for young children.

Garment


Criteria/measurements


Lifejackets


Maximum body weight 52 kgs (114 lbs)


Teen bras


Size 34B


Leotards/body stockings/full body swimsuits


Shoulder to crotch 70 cms (27½”)


Saris


422 cms x 104 cms (166” x 41½”)


Lungis


156 cms x 94 cms (61½” x 37”)


Tights


Waist-crotch-waist


lightweight 51 cms (20”)·


heavyweight 56 cms (22”)


Socks


Boys - shoe size 6½ girls/unisex - shoe size 5½


4.2.1 Larger sizes

If the above measurements are exceeded, the garments are still accepted as designed for young children if you can show that they are either:

(a) designed to fit a body size no larger than those in paragraph 4.2.2 or

(b) restricted by some other design feature to those under 14. You will have to be able to show to us that the body sizes you have used are appropriate to the under 14s and the garments produced are only suitable for that age group. You must let us know your specifications and reasoning and get our written agreement before you zero rate your supplies.

4.2.2 Body measurements

If you can show that you have designed a garment for a person under 14 and the body measurements used are at, or below those in this table, you may zero rate the resulting garment irrespective of its measurement, as long as it is only suitable for young children (see Section 5).

Body part measured


Boys


Girls


Height


163cms


64’’


161cms


63’’


Chest


84cms


33’’


85cms


33.5’’


Waist


70cms


27.5’’


69cms


27’’


Hips


85cms


33.5’’


90cms


35.5’’


Arm (shoulder to wrist)


59cms


23’’


57cms


22.5’’


Inside leg


77cms


30’’


76cms


30’’


4.2.3 One-size and stretch garments

You cannot zero rate articles of clothing which are sold in one size only and that are suitable for both children and adults. Articles that stretch to fit, such as some sportswear, can be zero-rated provided the garment is designed to fit a body size in accordance with paragraph 4.2.2 or at its maximum stretch does not exceed the measurements in paragraph 4.2.

4.3 Footwear

We will accept that footwear is designed for young people when the following measurements are met:

Boys’ shoes: up to and including size 6½.

Girls’ court shoes (that is a low cut shoe without straps or other fastenings): up to (and including) size 3.

Other girls’ shoes: up to (and including) size 3; and sizes 3½ to 5½ as long as the heel height does not exceed the sole depth by more than 4 cms (approx 1⅔ inches).

4.3.1 American and continental sizing equivalents

UK


American


Continental


Boys 6½


7 (unless 7½ is marked as equal to UK 6½)


40


Girls 3



35½ (35 if no half sizes)


Girls 5½


7


38½ (38 if no half sizes)


4.3.2 Larger sizes

If you can show us that your products are designed exclusively for the under 14s and that they are held out for sale to this age group (see Section 5), you may be able to zero rate bigger sizes, but you must contact us with your reasons and obtain our written agreement before doing so.

4.3.3 Unisex footwear

Most lines of footwear are designed for one sex or the other, either in overall construction or by the choice of colour and trim. You should zero rate such footwear according to the rules relating to girls’ or boys’ footwear as appropriate.

True “unisex” footwear is as suitable for girls as it is boys and can only be zero-rated up to and including size 5½, the maximum size for girls’ footwear.

4.3.4 Feet of differing sizes

Where a child has one foot significantly larger than the other or requires an unusually high heel for one foot, the pair of shoes can be zero-rated if the smaller shoe qualifies for the relief.

4.4 Hats and other headgear

4.4.1 Hats

Young children have proportionately larger heads than older persons and many children’s hats will fit adults. However, you can still zero rate hats (including caps and other items of headgear) which are suitable by design only for young children, for example babies’ bonnets, school hats, or if they are clearly held out for sale for young children.

The following items have been accepted as falling within the relief:

  • protective helmets (such as those for skateboarding or ice hockey) up to a maximum size of 59 cms as long as they are designed and marketed exclusively for children (see Section 5) and
  • riding hats up to and including 6¾ (jockey skulls up to size 1) even if they are not held out for sale for children.

If you sell larger riding hats specifically for young children, you can zero rate them as long as they are fitted, adapted or otherwise appropriate only for young children. For example, the range of riding hats for young children may be less sophisticated (in terms of design and appearance) than the adult range in the same sizes. If you think that the riding hats are eligible for the zero rate, you must check with us first and get our written approval before zero rating them.

All cycle helmets are zero-rated irrespective of size or how they are held out for sale.

4.4.2 Other headgear

Some articles worn on the head cannot be zero-rated even though they are for young children because they are accessories rather than clothing. This includes all articles that do not cover the whole head such as:

  • alice bands
  • hair ribbons and slides
  • “scrunchies”
  • sports and other headbands and
  • sun visors and ear muffs.

Novelty hats, party hats and play hats made out of materials such as paper or plastic are not clothing but toys, and are standard-rated.

4.5 Belts, braces and other items

We accept belts, braces, neckties, gloves, garters, scarves, ruffs, collars and shirt frills as traditional items of clothing and they may be zero-rated irrespective of size as long as they are held out for sale for the under 14s only (see Section 5).

5. Items suitable only for young children

5.1 Is it suitable only for young children?

This is the final step in deciding whether or not you can apply the zero rate to your product. You must have addressed the previous steps detailed in paragraph 1.4 before considering the requirements of this section.

The final test that must be satisfied is that the articles must not be suitable for older persons. This can be met by ensuring that they are “held out for sale” for young children, which is your statement that the items are suitable only for young children and therefore unsuitable for older people.

5.2 What does “held out for sale” mean?

This is the way in which the article is labelled, packaged, displayed, invoiced or advertised. It includes any promotional items and the heading under which an article is listed in a catalogue, webpage or price list.

You cannot necessarily zero rate goods you sell simply because they were zero-rated when you bought them. How they are held out for sale will affect their liability.

Goods, which may qualify at the design stage, will fail the suitability test if they are labelled to fit sizes larger than those in the body measurements table in Section 4.2.2, as will those labelled as suitable for age “13/14” and above, or by the ladies' sizing system (8, 10, 12, and so on).

5.3 Zero rating by manufacturers

You must be able to show us that items qualify for zero rating from product specification or other documentation. You must identify them appropriately on any labelling and packaging, and in any promotional material and on invoices.

5.4 Zero rating by wholesalers and distributors

You must clearly identify the article as being only suitable for children on invoices and price lists. If the goods are on display they must clearly be identified and segregated. If you provide a catalogue, it must identify the articles as being for children, preferably in a separate children’s section. The identical product must not appear in both adult and children’s sections.

5.5 Zero rating by mail order and internet suppliers

You must clearly identify the goods as being for young children in any price list, page, catalogue or other promotional material, preferably using a discrete children’s section. The potential purchaser should be in no doubt that the goods they are looking at are for young children. Identical goods must not appear in both adult and children’s sections.

5.6 Zero rating by retailers

You can zero rate clothing for young children only if it is clear from labels, signs, packaging, advertising, etc that it is intended for young children and you either:

  • sell it from a shop, a separate department in a shop, or a separate section of a catalogue which caters exclusively for children, or
  • keep it apart from adult garments by selling it from separate shelves, racks, etc which are clearly marked up as “boys”, “girls” or “children’s”.

The extent to which you are able to isolate and identify young children’s clothing will vary depending upon the size and type of retail outlet you have. However, you should be able to show us that you have as good a system as is practical in your circumstances. The potential purchaser should not be left in any doubt that you are selling items for young children.

5.7 Impact on retail scheme calculations

Because the way you hold goods out for sale may affect their VAT liability, you will need to consider the operation of your retail scheme.

The paragraph on goods bought at one rate but sold at another in VAT Notice 727/4 Retail schemes: How to work the Apportionment schemes and Notice 727/5 Retail schemes: How to work the Direct Calculation schemes provides the essential information on this topic.

6. Uniforms

6.1 What about uniforms for school and children's organisations?

There is no specific relief for items of school uniform, they are subject to the normal rules for children’s clothes.

However, if you supply garments under a specific agreement with a school catering exclusively for pupils under 14 years of age you may be able to apply the zero rate beyond the garment measurements in paragraph 4.2.

The garments must be unique to that school by design, such as a prominent badge or piping in school colours, and held out for sale as being for that school only. If these conditions are met, you may apply the zero rate irrespective of garment size.

The same principles apply to clothing items which form the uniform of other children's organisations catering exclusively for the under 14s, such as Beavers and Brownies.

These may be zero-rated irrespective of size provided they are:

  • designed exclusively for the organisation;
  • worn only by under-14s, and
  • clearly identifiable to the organisation.

Zero rating does not apply to items which may also be worn by older groups such as Scouts.

7. Cloth kits

7.1 Can I zero rate packaged kits for making children’s clothes?

Yes, but only if:

  • the clothes themselves would be zero-rated;
  • the material is already cut to the pattern or the pattern is indelibly printed on the material, and
  • it is clear from the labelling or other promotional material that the made up garment is only suitable for young children.

8. Mixed supplies

8.1 What about mixed supplies?

If you sell play outfits consisting of both zero-rated clothing and incidental standard-rated items at an inclusive price (such as a cowboy suit with a toy gun or a policeman’s uniform with toy handcuffs), the supply is seen as a single supply of children’s clothing and you may zero rate the whole sale.

Where the standard-rated element is not incidental, such as a babies gift set comprising of a bib and feeding cup, you will need to consider the liability of the supply in the light of the guidance in the paragraph on mixed supplies in VAT Notice 700 The VAT Guide.

9. Services

9.1 Cut, make and trim

You can zero rate the process of making young children’s clothing from cloth owned by someone else. Other processes may also be eligible for zero rating if, after the work is finished, the processed article clearly becomes a child’s garment which itself is normally zero-rated or the processed goods can only be incorporated in such an item.

9.2 Alteration, repair, embroidery and similar services

These services do not qualify for the relief as they are applied to goods that maintain their essential nature. For example, a blazer that has its sleeve length altered, its collar repaired, or a school badge embroidered on its pocket, is not sufficiently changed by that process to produce a new item.

However, if the blazer were changed into a waistcoat by the process, the service would have produced a new item. If this waistcoat meets the criteria for zero rating then the process would also be zero-rated.

9.3 Hire or loan of children’s clothing and footwear

You can zero rate the hire or loan of any item that would itself be zero-rated. This include items such as bridesmaids’ and page boys’ outfits, fancy dress costumes and nappy hire services where the nappies are collected for laundering and replaced with fresh ones.

The separate supply of ice-skates, roller skates, ten-pin bowling shoes etc, is also eligible for the relief in accordance with the size criteria for footwear in paragraph 4.3. However, if you charge a single price for admission that also includes the loan of footwear, you must consider your supply in the light of the guidance on mixed supplies in VAT Notice 700 The VAT Guide.

Your rights and obligations

Your Charter explains what you can expect from us and what we expect from you. For more information go to Your Charter.

Do you have any comments or suggestions?

If you have any comments or suggestions to make about this notice, please write to:

HM Revenue & Customs
VAT Liability Policy Team
3rd Floor
100 Parliament Street
London
SW1A 2BQ

Please note this address is not for general enquiries.

For your general enquiries please phone our Helpline 0845 010 9000.

Putting things right

If you are not satisfied with our service, please let the person dealing with your affairs know what is wrong. We will work as quickly as possible to put things right and settle your complaint. If you are still unhappy, ask for your complaint to be referred to the Complaints Manager.

For more information about our complaints procedures go to www.hmrc.gov.uk and under quick links select Complaints.

How we use your information

HM Revenue & Customs is a Data Controller under the Data Protection Act 1998. We hold information for the purposes specified in our notification to the Information Commissioner, including the assessment and collection of tax and duties, the payment of benefits and the prevention and detection of crime, and may use this information for any of them.

We may get information about you from others, or we may give information to them. If we do, it will only be as the law permits to:

  • check the accuracy of information
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We may check information we receive about you with what is already in our records. This can include information provided by you, as well as by others, such as other government departments or agencies and overseas tax and customs authorities. We will not give information to anyone outside HM Revenue & Customs unless the law permits us to do so. For more information go to www.hmrc.gov.uk and look for Data Protection Act within the Search facility.

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