The position is that, since 1 March 1985, articles of children's personal footwear of sizes which do not exceed the size appropriate to children of average foot size of 10 years of age, but excluding footwear which is not described, labelled, marked or marketed on the basis of age or size, are zero rated for VAT. The provisions of EU VAT law would rule out any extension in the scope of the zero rate at this stage.
I should point out that the administration of the VAT system is primarily a matter for the Revenue Commissioners. In this regard, the VAT administration branch of the Revenue Commissioners and the representatives of the footwear trade agreed at the time of implementation of the zero rating for children's shoes, that all baby and infant footwear and all children's footwear up to and including size five and a half (38 continental or equivalent) qualified for the zero rating provided the footwear was labelled and marketed on the basis of age or size.
However, during the course of 1997 it came to the notice of the Revenue Commissioners that changes in fashion trends had made it difficult to distinguish between children's and adult footwear. This is particularly the case in relation to footwear which is suitable and sold for adults and children across a range of sizes.
The Revenue Commissioners were concerned that this should not give rise to an anomaly. For instance, a strict interpretation of the legislation could have resulted in a child's size 3 "Doc Marten" being liable to VAT at the standard rate of 21 per cent as they were not specifically designed for children.
In order to avoid such a situation, the Revenue Commissioners agreed with representatives of the footwear trade that footwear manufactured in the full range of sizes from the smallest children's to adults' sizes could be zero rated up to an including size 5½ for these specific styles. All other footwear will remain liable for VAT at the standard rate of 21 per cent unless it can be shown it was designed for the use of children, in which case the 5½ size cut-off will apply. Thus, there has been no restriction in administrative practice in relation to the application of the zero rate for children's shoes. The contrary is, in fact, the position.
The revised practice which applied from 1 July 1997 was made known to the trade at the time and an information notice was placed in Issue 27 of "Tax Briefing", a Revenue Commissioners publication, in August 1997. In addition, the Revenue Commissioners also intend to issue a statement of practice on the matter.
