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01/05/20

Emergency VAT measures announced: Zero-rating of PPE and e-publications

Liaison Financial

The Government has announced two emergency COVID-19 related VAT measures that have immediate effect and will save costs for the NHS.

Zero-rating personal protective equipment (PPE)

With effect from today (1 May 2020), supplies of PPE equipment are zero-rated. This includes supplies to the NHS, care homes and individuals. This is a temporary relief from VAT and is planned to end on 31 July 2020.

Zero-rating applies to all PPE products that are recommended for use by Public Health England, the details of which can be found here.

Products eligible for zero-rating include:

  • disposable gloves
  • disposable plastic aprons
  • disposable fluid-resistant coveralls or gowns
  • surgical masks – including fluid-resistant type IIR surgical masks
  • filtering facepiece respirators
  • eye and face protection – including single or reusable full-face visors or goggles

Further details on this VAT relief can be found on HM Treasury’s announcement and HMRC’s briefing paper.

NHS organisations should ensure that any invoices received from 1 May for supplies of PPE equipment are correctly treated for VAT. If you have paid up-front for PPE items in April, but receive a VAT invoice in May, the supplier would be correct to charge VAT on their supply.

This follows on from the announcement on 1 April 2020 regarding the removal of import VAT and tariffs on vital equipment purchased from outside the EU.

Zero-rating of electronic publications

In another Covid-19 related measure, the Government has announced the zero-rating of electronic publications, also with effect from today (1 May 2020). This VAT relief was planned to be introduced on 1 December 2020 but has been brought forward to help parents educating at home. Unlike PPE, this measure will be permanent.

Zero-rating now applies to electronically supplied versions of the following:

  • books
  • booklets
  • brochures
  • pamphlets
  • leaflets
  • newspapers
  • journals and periodicals – including magazines
  • children’s picture and painting books

Zero-rating also applies to the lending of e-publications from an electronic library. This should directly benefit NHS organisations that subscribe to electronic libraries to source medical journals. COS recovery of VAT charged on electronic library services has been a contentious area with HMRC and zero-rating should resolve this issue. It will up to each publisher or on-line library provider to determine the extent that zero-rating applies to their publications and services. Should you have any doubt about the decision of your provider, please contact your Liaison VAT advisor.  

Further guidance on this measure can be also be found on the HMRC website.

Upcoming Webinar

Kenny Lee, Head of Tax Services at Liaison Financial, will be covering this topic as well as other COVID-19 related questions in a series of webinars next week, dates with spaces left to register are Tuesday 5 May and Thursday 7 May.

Please click on the above dates for full details and registration.

If you need further information on either of the above announcements, please contact your Liaison Financial VAT advisor.

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