Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the potential effect on the financial security of businesses during the covid-19 outbreak of extending the zero VAT rate on the supply of personal protective equipment beyond 31 October 2020.
The temporary zero rate of VAT on Personal Protective Equipment (PPE) was an extraordinary measure to help affected sectors (such as hospitals and care homes) during the initial shock of the COVID-19 pandemic and when the global supply of PPE did not meet demand.
This measure came to an end on 31 October (as legislated), as alternative measures introduced by the Government will ensure the supply of COVID-19 related PPE to affected sectors from November. This means the VAT relief is no longer required to ensure the supply of PPE is maintained and businesses that make VATable supplies can also recover any VAT they incur on the purchase of PPE as a business expense.