UK Government Announces £155m Tax Break On PPE

The government of the United Kingdom has extended temporary tax relief to the public, to the tune of 155 pounds. This comes as an urgent response to the coronavirus pandemic which has crippled the economy at a global level. Following the latest reports, an estimated 43,995 citizens have died from it, with another 283,757 having tested positive. The onset of these figures and a progressive rise on the same has forced the government to set in motion a directive that will hopefully flatten the disease curve.

In the early stages of COVID 19, the supply of Personal Protective Equipment PPE posed a challenge to the state. Frontline workers and the commerce sector ran on a deficit of the protective gear long before the state leaders announced a deal to manufacture 2 billion PPE items, in late March. This move was intended to address the deficiency enigma, one that was proven to have a close link with driving up the mortality rate.

Consequent state discussions pressurized the government into introducing a zero rate VAT relief on PPE items, initially ordained from May 1st to June 31st. However, the Treasury recently announced a fresh extension of the same up to October 2020. Additionally, this tax waiver comes on top of scrapping off import duty on critical PPE supplies.

According to the government website, the current state law under the VAT Act 1994 applies a standard rate of 20% on all PPE goods, however, the temporal new zero rates will be introduced to this legalese, effective till 31st of October. The relief policy will benefit individuals and businesses at large, ensuring that as many people as possible gain easy access to facemasks and gloves, but even more so essential public workers.

The government has taken the responsibility to provide PPE supplies that fall within the Public Health England guidance (protective visors, surgical gowns, facemasks, and gloves) particularly to the health welfare sector. This means that care homes and similar providers will have tax free protective equipment, a necessary aid especially during this time that the country’s economy is reopening.

The Private Social sector and other vital state industries such as retail, manufacturing, and food processing companies will have to source for their own supplies; however, the VAT cut will still work to their advantage by ensuring that the costs are not exaggerated.

The impact of this directive is estimated to save the business and health division a decent coin which, possibly, will be channelled towards a savings strategy. Overall, the government is hoping to witness a constructive change after having reinforced its health safety measure.

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