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Extended Tax Cut For Personal Protective Equipment (PPE) & National Supplies

Extended Tax Cut For Personal Protective Equipment (PPE) & National Supplies

The Government has announced the temporary scrapping of VAT on PPE for use in infection control has been extended until 31st October – saving care homes and businesses dealing with the Coronavirus outbreak about £155 million.

The import duty on PPE continues to be zero rated.

The decision, which will make it easier and less expensive for care homes, domiciliary service providers, charities and businesses to acquire the vital kit comes after a temporary zero-rate of VAT was applied to PPE sales for an initial three months from 1st May 2020 to 31st July 2020.

EU law governing VAT – to which the UK is bound until the end of the transitional period on 31st December 2020 – requires the UK to charge VAT on the equipment; however, the Government has acted under an ‘exceptional basis’ allowed by EU rules during health emergencies.

The move will particularly benefit care providers, who are often unable to reclaim the 20% VAT they incur on their purchases.

Funding has been provided to the Department of Health & Social care (DHSC) to support the centralised procurement and supply of PPE, including supply to the NHS and private care providers.

It has already acted to speed up PPE supply and created a new national distribution network.

Here’s the link to the Government’s PPE supply portal: https://www.gov.uk/guidance/ppe-portal-how-to-order-emergency-personal-protective-equipment