Ministers facing growing pressure to U-turn over ‘mask tax’ as Labour claims failure to extend suspension of VAT payable on PPE could cost families extra £100 over next six months
- VAT on PPE has been suspended since May but the cut is due to end in November
- Labour has called reimposition of VAT a ‘mask tax’ and is calling for extension
- Labour claims charging VAT on masks could cost families £100 in six months
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
Downing Street this afternoon defended the decision to stop the VAT holiday on PPE.
The Prime Minister’s Official Spokesman said: ‘It is probably worth me setting out what the VAT relief on PPE was designed to do, and that was to accelerate supply to the health and social care sectors when supply did not match demand earlier this year.
‘What it did was save them around £200 billion when they needed it.
‘Prices and supply have now stabilised and we have committed to providing free PPE to every adult care home, who have been the main beneficiaries of this tax relief, until March 2021.
‘Also most businesses can recover any VAT that they will incur (when buying) PPE as business expenses.’