VAT has been suspended on essential personal protective equipment (PPE) for Covid-19, in a move which the Treasury estimates will save users including care homes more than £100 million.
Care homes, businesses, charities and individuals currently have to pay the sales tax at 20 per cent on protective facemasks, gowns and gloves, and are often unable to claim the tax back.
Sources at the Treasury have said that the three-month suspension of VAT on PPE was made possible after the European Commission indicated support for temporary reliefs to mitigate the impact of the pandemic. Although the UK formally left the EU on 31 January, it remains bound by Brussels rules until the end of a transition period in December.
UNISON general secretary Dave Prentis had earlier this month called for the wavering of VAT on PPE equipment, saying: “No social care employer should be paying VAT for what has clearly become essential equipment.“This is a national emergency. The virus is tearing through care homes and everything possible must be done to stop it. That means cutting the costs of PPE from today.
“Care workers are worried sick about the people they look after and also fear for their own health. Suspending VAT immediately for the duration of the crisis will make a huge difference.
“The government must also send a clear directive to suppliers and retailers not to hike the cost of life-saving safety equipment. No one should be trying to make a quick buck from people’s desperation to stay well during the pandemic.”
Care providers welcomed announcement that VAT is to be removed from the purchase of PPE for care providers for the next three months as they fight the coronavirus pandemic.
The Independent Care Group (ICG) said it was refreshing to see that the Government was listening to the pleas of social care providers who are struggling financially because of the fight against Covid-19.
ICG chair, Mike Padgham said: “We are pleased that the Chancellor has listened and taken this step to save some money for social care providers.
“It is a good start and we hope that it is followed by further measures, like efforts to ensure that more funding is given to local authorities so that they can help social care providers and that this help gets to the front line.
“We would also like the Government to help providers to support social care workers who are off sick because they have diagnosed Covid-19 or have symptoms.
“In the longer term we want a complete review of social care.
The ICG has previously warned that care providers are being hampered in their fight against Covid-19 through a lack of PPE and insufficient testing. It has also called on the Government to provide better financial support for care providers amidst concerns that the £3.2bn so far pledged for local authorities to help them support social care is not getting to the front line.
Mr Padgham added: “Care providers have been suffering financial hardship for many years due to chronic under-funding. Now they are facing huge increases in costs, for instance the costs of bringing in agency staff to cover for staff who are unwell, sick pay costs and the increasing cost of protective equipment. Due to stopping admissions, some care homes are also seeing a dramatic reduction in income and homecare providers are suffering a reduction in contracts.
“The Government has repeatedly promised to do whatever was needed to get the country through the pandemic. Social care now needs that action, otherwise providers will not be able to play their part in beating Covid-19 and many could cease to operate at all.”
Social care currently looks after 400,000 people in care and nursing homes – that is three times the number in NHS hospital beds. Social care looks after a further 640,000 people in their own homes.