Great Britain

Covid face mask cost to rise by 20% as Government scraps tax holiday on PPE

THE cost of disposable face masks is set to rise by 20 per cent next week as the government scrap the PPE tax holiday.

The six-month tax holiday on vital Personal Protective Equipment is up on October 31.

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The Telegraph reports retailers have been informed the temporary measures - which apply to face masks, visors and gloves - are up at the end of this month.

The holiday was put in place at the beginning of May in a bid to offer some slight relief amid the spiraling coronavirus crisis.

The move was hailed by care home bosses, some of whom were spending tens of thousands of pounds in order to help keep their residents safe.

And as face masks were made mandatory in businesses and on public transport over the summer the public reaped the benefits of the reduced protective gear too.

Tens of millions of the one-time use blue masks have been sold in the UK , with the estimated cost of the VAT break standing at around £200 million.

But the Treasury says it's now time to scrap the measures as stocks and sales have stabilised.

It means that from November 20, the full 20 per cent VAT will now be charged on PPE.

But despite a new scheme announced by the Health Secretary which will see £550 million put in place to help provide care homes with PPE, care providers worry the new VAT measures could affect them.

Care home bosses say Hancock's scheme is capped, meaning they could still need to purchase the gear privately.

Speaking to the Telegraph, Nadra Ahmed described the VAT as an "extra financial burden".

She said: "Even under the new scheme most providers are having to purchase more PPE on top. The 20 per cent extra they will be paying in VAT will have an impact.".

And Raina Summerson, group chief executive of care provider, Agincare, said: "People think that we are now getting PPE for free but we are not getting anywhere near enough. There are problems with the way the system has been set up and there have also been supply issues.

Meanwhile, a source from the Treasury told the paper: "This relief was designed to relieve the burden of VAT on the price of purchasing PPE used for protection from coronavirus by front line workers, and has particularly aided sectors that cannot recover VAT on such goods due to their VAT exempt status, such as care homes.

"Since then, DHSC have stabilised the UK PPE supply chain to meet current demand and are building a stockpile which will be in place by the 1 November.

"The temporary zero-rate of VAT on PPE is therefore no longer required and will end on the 31 October 2020 as planned. From 1 November 2020 the VAT treatment for supplies of PPE will revert back to the standard rate."

Health Secretary Matt Hancock says we've signed deals to manufacture 2bn items of PPE in the UK as well as other contracts around the world

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