End of PPE VAT waiver deals ‘real and unnecessary blow’ to wholesale

Food and drink wholesalers are among the businesses that will be hardest hit by a higher price for personal protective equipment (PPE) as the government announced its six-month VAT waiver would not be extended.

The 20% sales tax will apply once more to PPE bought by firms and consumers from November.

“There couldn’t be a worse time to inflict extra costs on the food supply chain,” said James Bielby, Chief Executive, FWD. “Wholesalers have been trading at a loss for months because of the restrictions on their hospitality customers. Some of them are have lost 80% of their business and are struggling to maintain their contracts to schools, hospitals and care homes.

“To burden them with a 20% increase in the price of equipment that they rely on to carry out their operations is kicking them when they are down and it will only increase the existing risk to food distribution to vulnerable groups. The reasons for introducing a zero rate haven’t changed, and we face months of further Covid-19 measures. It’s disappointing that the zero rate isn’t being continued for as long as Covid restrictions on trade are in place.”

Dawood Pervez, Managing Director, Bestway Wholesale agrees: “Right now there is a significant amount of PPE stock in the market as retailers and wholesalers have built up stocks in advance of Winter and increasing Covid-19 infections. A clear objective of the industry – and government – has been to ensure retailers and their teams all stay safe, and to keep PPE in strong evidence on shelves up and down the country in order to protect consumers and ensure there is no repeat of PPE shortages seen earlier in the year.

“An increase of 20% is a significant amount, and it is a surprising move if we all wish to keep safe and control the pandemic. There is little doubt that increases in price will slow demand and act as a barrier to buy PPE for some, at a time when many peoples’ income has been reduced due to the pandemic, and every penny in their shopping basket counts.”

Andy Kemp, Sales and Marketing Director, Bidfood Group said: “Ending the zero VAT rate on PPE at the end of this month gives both hospitality and wholesale businesses very little notice, and places a huge burden on a sector which is already seeing incredible challenges and cost pressures from Covid-19 measures.

“It is a real and unnecessary blow to businesses that have been working so hard to create Covid-19 secure environments that the public are happy to eat in, and we would question the timing as the country equips itself to face a second wave.”

The Treasury confirmed that VAT would apply to PPE from 1 November, stating that the cut was only ever intended to maintain the supply to healthcare providers, not to reduce costs for businesses and consumers.

Andy Kemp Bestway Wholesale Bidfood coronavirus covid-19 Dawood Pervez FWD Government hospitality James Bielby PPE wholesale