The temporary VAT cut on personal protective equipment (PPE) will be extended until the end of October, it has been announced.
According to the Treasury, the three-month extension will save care homes, charities and businesses an estimated £155 million in tax.
The move comes after the Government waived VAT on PPE – such as face masks and gloves – purchased by businesses, charities and individuals in May to protect workers by preventing the spread of the coronavirus.
The zero-rated period initially lasted three months from 01 May 2020 to 31 July 2020, but the extension will now see the measure in effect until at least October 2020.
Experts who called for the change said scrapping tax will majorly benefit care homes and small businesses “who are often unable to reclaim the 20 per cent VAT they incur on their purchases”.
Commenting on the extension, Financial Secretary to the Treasury Jesse Norman said: “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.”
The move was only possible after the European Commission gave members the green light to enact temporary reliefs to mitigate the impact of the coronavirus, such as waiving VAT. Although the UK left the EU on 31 January, it remains bound by Brussels rules until the end of the transition period.
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