Do you sell PPE used by people, or buy PPE to protect you or your staff to combat Covid-19?

Do you sell PPE used by people to combat Covid-19 or are you buying PPE to protect you and your staff from Covid-19, if so please be aware that the VAT status of some PPE is temporarily changing effective from 1st May 2020.

The Government announced on Thursday 30th April that for the months of May, June and July 2020 PPE bought by care homes, business, charities and individuals to protect against Covid-19 will be free from VAT.

This announcement whilst greatly needed by the care sector does come with a significant amount of admin for those supplying PPE, with only one day’s notice.

For buyers of PPE who are VAT registered this will have a reasonable cash flow advantage, however as VAT would normally be reclaimable on PPE there will be no savings to these businesses.

For Buyers of PPE who are not VAT registered or have Exempt supplies which mean that VAT wouldn’t ordinarily be reclaimable (such as Care Homes) this will be a significant saving to the cost of buying in PPE. Although as most businesses are buying in a larger amount of PPE than normal in order to ensure staff have a safe work environment it is unlikely to be a saving on PPE overall.

If you are a supplier of PPE, you will need to ensure that you identify which lines of stock you are supplying which fall into the Covid-19 PPE category and ensure that software and invoices are updated accordingly to ensure you include these supplies as zero rated rather than standard rated.

The items of PPE covered by the new Zero rating are those recommended for use by Public Health England in its guidance dated 24 April 2020 titled ‘Guidance, COVID-19 Personal protective equipment (PPE)’. This Includes items such as disposable gloves, disposable plastic aprons, disposable gowns, surgical masks, filtering face piece respirators, eye and face protection including visors and goggles.

Link to HMRC guidance below:

https://www.gov.uk/government/publications/revenue-and-customs-brief-4-2020-temporary-vat-zero-rating-of-personal-protective-equipment-ppe

If you have any queries please do not hesitate to contact us.

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