Temporary VAT holiday on PPE set to finish
VAT on PPE is set to resume at 20% from the end of October after the Treasury ended its ‘tax holiday’.
The tax was cut on the 1 May to ‘relieve the burden’ on frontline workers of purchasing PPE. The Guardian believes the cut on VAT has saved healthcare workers £300m over the last six months.
With a reintroduction just around the corner, the BDA is calling on Rishi Sunak to change his approach.
‘A policy designed to relieve burdens on the healthcare sector is set to go when it is most needed,’ British Dental Association chair, Eddie Crouch, says. ‘The result is dentists, care homes and tens of thousands of other businesses will struggle with added costs.
‘A short-term extension is essential, but we need to see real imagination from government. Giving health and social care providers the ability to reclaim these costs could offer a viable way forward.
‘PPE is a fact of life for the foreseeable future. We need clarity on why VAT on this life-saving necessity isn’t going the way of the Tampon Tax.’
VAT open letter
The BDA has written an open letter to the Chancellor calling for an extension to the VAT-free period.
A consortium of social care providers is now also pressing for a fairer set of rules to enable homes to reclaim VAT.
‘In order to maintain the financial sustainability of the dental profession, and hence safeguard the nation’s oral health, the (VAT) zero rating must be extended,’ the BDA open letter says.
‘A sustainable longer-term solution would enable all health and social care providers to reclaim VAT on their expenses. Including PPE.
‘Certainly, there are now real questions from across the health and social care sector as to why VAT is even applied to a necessity like PPE.’
Recent UK government plans suggest dental practices will have access to free PPE as part of a second-wave strategy.
In its PPE plan, the government has set out how it will help to slow the transmission of COVID-19.
In order to respond rapidly to demand surges in the future, the Department of Health and Social Care will build a stockpile. This will reflect around four months’ stock of each product group, and plans state the government should stock it by November 2020.
Practices must apply through the PPE portal, which will have an expanded product range. For example, it will now include:
- Type IIR masks
- Hand hygiene
- Additional items, such as respirator masks, will be available by October.
Weekly order limits are based on the size of the provider. This will increase in line with any surge in demand.
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