The UK Treasury has extended the temporary exemption of vat on personal protective equipment (PPE) until 30 October. Previously the decision for temporary zero-rate of VAT was applied to PPE sales for an initial three months from 1 May to 31 July.
The zero-rate will now apply for six months which will save an additional $195 million with a total of consumer, including care homes, home care providers and businesses. The latest move will especially benefit caring suppliers, who are often unable to recoup 20% VAT on their purchases.
Financial secretary to the Treasury, Jesse Norman, commented regarding this issue, ‘Extending the zero VAT rate on PPE will provide the relief needed by care homes in particular, so that as many people as possible continue to be protected against the coronavirus.’
UK was bound to EU law governing VAT until the end of the transitional period which requires the UK to charge VAT on the equipment. However, the government has acted on an exceptional basis allowed by EU rules in health emergencies. The European Commission has recently signaled support for the introduction of temporary VAT relief for member states to mitigate the effects of the Covid-19 epidemic.
The government had earlier removed import duties from PPEs and medical supplies in April to help respond to the coronavirus epidemic to ensure more necessary equipment could go to the front lines.