VAT on Children’s Clothes

VAT is not charged on clothing for children as children’s clothes are zero rated. However, to qualify for zero rating a garment must meet four conditions:

• It must be an article of clothing or footwear.
• It must be designed for young children.
• It must only be suitable for young children.
• It must not be made of fur.

What are 'articles of clothing' (for VAT purposes)?

In most cases it is not difficult to identify an article of clothing, but for VAT purposes, items which are not obviously clothing may qualify to be zero rated. For example, hats, belts, scarves, bibs, nappies and baby shawls.

Cyclists’ hi-visibility tabards and sailors life jackets are also considered to be items of clothing, despite their primary use being safety aids.

Items not considered 'articles of clothing'

Items which are not treated as articles of clothing include:

• reflective arm bands or buoyancy aids
• hand muffs and earmuffs
• Alice bands
• sports and other headbands
• sun visors
• ‘mother-and-baby’ shawls intended to wrap around both mother and child.

These are all subject to VAT at the standard rate.

HMRC also consider novelty hats, party hats and play hats made out of materials such as paper or plastic to not be items of clothing. They are categorised as toys and VAT chargeable at the standard rate.

• See also: VAT on children's face masks

Designed and suitable for young children

Zero rating only applies to clothing designed for, and only suitable to be worn by, young children. VAT Notice 714, VAT on Young Children’s Clothing & Footwear, sets out the sizes which HMRC consider to be children’s clothing sizes suitable for children under the age of 14.

Clothing which exceeds the measurements prescribed by HMRC may still be zero rated if the clothing is only appropriate for a child under the age of 14. For example, uniforms for Brownies or Beavers.

School uniforms can be zero rated regardless of size if they are exclusively for schools which only cater for pupils under 14. The clothing must be unique to the school, for example, show the school badge and be held out for sale as being for one particular school only.

Articles of clothing which are sold in one size only and that are suitable for both children and adults are not zero rated but clothes which stretch to fit, such as leggings, can be zero-rated if the garment is designed to fit a body size which does not exceed HMRC’s published measurements.

Items made of fur are excluded from zero-rating

Children’s clothing made wholly or partly from fur skin is specifically excluded from being zero rated.

Exceptions

There are some exceptions to this and providing the clothing meets the other conditions for zero rating, VAT is not chargeable on the following:

• articles made of artificial fur.
• clothing made of rabbit, sheep or lamb skin.
• articles made from leather.
• fur and fur-lined hats, belts and gloves.
• articles only trimmed with fur although this is dependent upon how much of the garment is fur-trimmed.

Identifying the VAT treatment of clothing is not always straightforward and you should seek qualified, professional advice if you have any doubt as to whether an item of clothing qualifies to be zero rated. It could save you a lot of hassle!