Rishi Sunak is under mounting pressure to perform a U-turn on plans to reimpose VAT on the sale of personal protective equipment (PPE) as Labour labelled the move a 'mask tax'.
The Treasury cut VAT on PPE to zero in May this year, making it cheaper for businesses and individuals to buy items like face masks and aprons.
VAT on PPE was due to return to its normal rate of 20 per cent in August but the Treasury decided to extend the holiday to October 31.
The Chancellor is now being urged to extend the suspension of VAT on PPE again as Labour said it would be 'unbelievable' for the Government to 'introduce a mask tax in the middle of a pandemic'.
The opposition claimed reimposing VAT at 20 per cent on disposable face masks from November 1 could cost a family of four - two adults and two teenagers - an extra £94 over the next six months.
Chancellor Rishi Sunak is under mounting pressure not to reimpose VAT on PPE after a six month holiday amid warnings the 'mask tax' could hit families hard
The suspension of VAT on PPE has cost the Government an estimated £255 million over the last six months.
But any move to make masks more expensive at a time when the nation is still in the grip of the coronavirus crisis and as many families face financial difficulties will inevitably spark a furious backlash.
Labour shadow financial secretary to the Treasury James Murray said the move was 'the last thing' families need.
'It's unbelievable that the Government wants to introduce a mask tax in the middle of a pandemic,' he said.
'With Covid cases on the rise across the country, the Government should be doing all it can to help people follow its own guidance to wear a mask, not ramping up the cost of buying one.
'Families across the country are already struggling financially as a result of the crisis. The last thing they need is to be penalised for doing the right thing.'
Face masks are currently mandatory for shoppers and for people on public transport as well as in a range of other settings including in museums and taxis.
Approximately one third of people are estimated to use a disposable mask which means the reimposition of VAT will hit many people in the pocket.
When the Government announced the initial extension of the VAT holiday to October 31 back in July, Treasury Minister Jesse Norman said: 'Extending the zero VAT rate on PPE will provide the relief needed by care homes in particular, so that as many people as possible continue to be protected against the coronavirus.'
The wearing of masks is compulsory in shops and on public transport in England
As well as consumers facing a rise in mask prices if Mr Sunak fails to perform a U-turn, business chiefs have also warned they will be hit hard.
James Bielby, chief executive of the Federation of Wholesale Distributors, told the Guardian last week when it first emerged the Government was not planning an extension that 'there couldn't be a worse time to inflict extra costs on the food supply chain'.
'The reasons for introducing a zero rate haven't changed, and we face months of further Covid-19 measures,' he said.
'It's disappointing that the zero rate isn't being continued for as long as Covid restrictions on trade are in place.'