The government has introduced a zero-rate of VAT on the sale of personal protective equipment (PPE) for Covid-19. The temporary measure will apply from 1 May 2020 until 31 July 2020 unless any further extensions are announced. This move will save care homes and businesses dealing with the Coronavirus outbreak more than £100 million.
The government is acting under an exceptional basis allowed by EU rules during health emergencies. The European Commission recently indicated support for member states to introduce temporary VAT reliefs to mitigate the impacts of the Covid-19 pandemic. The UK remains bound by EU VAT law until the end of the transition period.
Products covered by the zero rate include:
The reduction in VAT will particularly benefit care providers, who are often unable to reclaim the 20% VAT they incur on their purchases.
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