The Government’s decision that PPE will be free of VAT for the next three months will also help many businesses wishing to protect their staff once the lock down is eased, said leading tax and advisory firm Blick Rothenberg.
Simon Newark,VAT partner at the firm said: ‘The Government has announced that from today (1st May), PPE purchased by care homes, businesses, charities and individuals to protect against COVID-19 will be free from VAT until 31st July 2020.’
He added: ‘This is a further measure to remove VAT on domestic sales of PPE after the recent removal of VAT on imported PPE. The Government estimates this will save around £100 million in VAT costs.’
‘Although European law requires VAT to be charged on such equipment, the European Commission has recently allowed member states (including the UK during the transition period) to introduce temporary VAT measures during the COVID-19 pandemic.’
Simon noted that: ‘This will save VAT costs for care homes, charities, and many other healthcare bodies that cannot claim refunds of VAT costs.’
Alan Pearce, head of VAT at the firm added: ‘With the rumoured opening up of schools, this will also allow them to buy PPE without additional VAT costs. Many other businesses may also be investing in PPE for their staff in advance of the phased relaxation of the lock down.’
Peace concluded that: ‘Although many businesses would be able to claim refunds of the VAT, for those in the finance and insurance sector, as well as in the health, education and charitable sectors who suffer VAT on their costs, this temporary zero-rating be a boost for them as well.’
Image credit: Freepik