Simon Newark said: “The Government has announced that from today (May 1), PPE purchased by care homes, businesses, charities and individuals to protect against COVID-19 will be free from VAT until 31 July 2020.
“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 £100m 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.
“This will save VAT costs for care homes, charities, and many other healthcare bodies that cannot claim refunds of VAT costs.”
Alan Pearce said: “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 lockdown. 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 will be a boost for them as well.”
If you would like to discuss any of the above or have other queries about how you can make the right decisions for the future of your business and your income, please contact your usual Blick Rothenberg contact or one of the partners whose details are to the right.
You can also visit our Coronavirus – Practical Guidance for businesses today Hub for our latest updates and insights.