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Coronavirus: Government announces £155m tax break on PPE

Oscar Williams-Grut
·Senior City Correspondent, Yahoo Finance UK
·2-min read
Pont Smith, co-owner and stylist of bebop hair salon in London, wears PPE as he cuts the hair of model Daisy George, during final preparations ahead of the salon's reopening, as further coronavirus lockdown restrictions are lifted in England. (Photo by Yui Mok/PA Images via Getty Images)
Pont Smith, co-owner and stylist of bebop hair salon in London, wears PPE as he cuts the hair of model Daisy George, during final preparations ahead of the salon's reopening. Photo: Yui Mok/PA Images via Getty Images

The UK government is extending VAT relief on personal protective equipment (PPE), a move it says will save care homes and businesses an estimated £155m ($193m).

The Treasury announced on Friday it was extending the temporary VAT until the end of October. The waiver was initially introduced on 1 May but was due to expire on 31 July.

Financial Secretary to the Treasury Jesse Norman said in a statement: “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 VAT cut comes on top of the scrapping of import duties on PPE in April. PPE refers to items such as face masks, gloves, protective visors, and surgical gowns.

The government is responsible for providing PPE to frontline healthcare workers in the NHS but private sector social care companies and care homes must source their own supply.

Many businesses are also supplying staff with PPE as the economy begins to reopen, particularly those in sectors such as retail, manufacturing, and food processing.

A lack of adequate PPE supply was a key issue in the early stages of the COVID-19 pandemic in the UK, with the government coming under pressure in April and May to ramp up supply. Health secretary Matt Hancock announced a deal to manufacture 2 billion items of PPE in Britain in late March.

The latest figures from Public Health England show 283,757 people in the UK have so far tested positive for COVID-19 and 43,995 have died. Yesterday Public Health England reported 576 new cases and 89 deaths.