VAT on Childrens' "Educational" Toys

Having said that in my old HMCE days I did have a long argument with somone who made cuddly toys and had basically glued small books in the mouths of a range of small toys over whether they could be zero rated as printed matter or not.

If his educational toys are playsuits then of course clothing elements would be zero rated, but any accessories such as handcuffs for policemen, swords for Knights etc are still standard rated or would need apportionment.

If the educational toys are designed so that they can solely be used by handicapped children then they can be zero rated, assuming an eligibility declaration is received from each purchaser stating the condition they suffer from.

But those are really the only possibilities other than that point him to Schedule 8 of the VAT Act 1994 which is the legislation that allows Zero rating and ask him which of these descriptions he thinks covers educational toys: "Bank notes; Books; Caravans and houseboats; Charities etc.; Clothing and footwear; Construction of buildings etc.; Drugs, medicines, aids for the handicapped etc.; Food; Gold; Imports, exports etc.; International services; Protected buildings; Sewerage services and water; Talking books for the blind and handicapped and wireless sets for the blind."

There are tribunal cases involving mixed supplies such as a book that perhaps comes with a small stuffed toy and in these cases, the Tribunals look to what the main supply is and decide accordingly.

But I'm not aware of the zero rating extending just to specific toys.  I suppose you could have something like a baby grow that comes with a small teddy and I'd argue that was a zero rated supply of a baby grow (clothing) with an incidental supply of a small teddy bear (especially if it is sewn onto the clothing).

But to get Lego or Transformers zero rated.....the answer has to be these are standard rated, but as with all things VAT, the devil is in the detail so does your client have a specific toy in mind?