Government scraps VAT for purchases of PPE in all sectors beyond healthcare

Mon 4 May 2020
Posted by: Ana Pintor
Trade News

VAT will not be charged on purchases of PPE (personal protective equipment) for a three-month period, the government has announced.


 The temporary measure applies to sectors across the board, to both domestic and international purchases of PPE and covering businesses, charities and individuals, as well as hospitals and care homes.


 Marco Forgione, director general of the IOE&IT, said the waiving of VAT for PPE purchases would “help businesses and employees across multiple sectors return to work safely and get the economy moving again”.


Call to increase customs training grant

Forgione said that “with many businesses seriously struggling for cash flow, we encourage government to continue to pull all available levers, including automatically deferring import VAT and duties on all goods.


“With Brexit still looming large and many workers on furlough, we also ask for government to extend the customs training grant scheme, increasing the funds available and allowing individual applications rather than asking people to rely on their companies.”


Government guidance

With attention now on an exit-from-lockdown strategy, the government is expected to soon issue guidance to companies on how best to protect staff returning to work.


Carolyn Fairbairn, director general of the CBI, wrote in the FT last week that a sustainable restart needed to be based on the availability of PPE and a clear testing regime.


Taylor Wimpey, one of the UK’s largest construction firms, called on the government to publish its strategy and was one of the first business to announce its own plans for returning to work, This is Money reports.


PPE will be needed for workers doing tasks which cannot be done under social distancing measures, Taylor Wimpey chief executive Pete Redfern said, giving the example of heavy manual lifting jobs that involve more than one person.


Customs declarations

Although import VAT will temporarily not be charged on PPE, importers will still need to include the correct VAT code on import customs declarations, said Kevin Shakespeare director of stakeholder engagement for the IOE&IT.


Failure to do so could result in the declaration being rejected or a standard VAT rate being charged.

Mr Shakespeare told the Daily Update (04 May):


“This latest government measure continues to recognise the importance of PPE to the national effort during these difficult times.


“Businesses should note these changes but also make sure that they apply efficient customs procedures in order to benefit from the zero rating of VAT.”