The government is expecting to give up to £1m to two charities after it pledged to pass on the VAT revenue it has received on personal protective equipment (PPE) donated to NHS and care providers.
Donations will be made to the Care Workers’ Charity and NHS Charities Together to support frontline workers affected by Covid-19.
HMRC estimates that the pledge will generate between £500,000 and £1m.
VAT is due on assets donated by businesses where they paid and reclaimed VAT when they originally purchased the goods. Businesses will have until the end of June to tell HMRC what VAT they have paid.
The Department for Health and Social Care will make the donation of the VAT on the government’s behalf.
Steve Barclay, chief secretary to the Treasury, said: “Frontline health workers are fighting Covid-19 day in, day out – in our hospitals, care homes and communities. Whilst we will never be able to fully express our gratitude to them, we want these donations to be a small sign of our appreciation.”
The government introduced a temporary zero rate of VAT on PPE on 1 May to reduce costs for care homes and businesses buying the essential equipment during the Covid-19 emergency.
The amount to be donated to charity will reflect the VAT collected on donations made from 1 March until 30 April - the period between PPE donations starting and when the zero VAT rate became effective.
'Care workers nurture and protect the most vulnerable people in our society and they deserve to be recognised'
Karolina Gerlich, executive director of the Care Workers’ Charity, said: “The Care Workers’ Charity is delighted to accept the donation from HM Treasury. The charity exists to support care workers, give them a voice and to advocate for the social care workforce.
“There are about two million care workers in the UK, many of whom exist on a low income. This means that if they are impacted by a crisis, it is all too easy for them to be plunged into a financial crisis. The charity supports care workers by offering grants for everyday living costs and emergencies that enable individuals and families to maintain a quality of life.
“This donation will boost our collaborative efforts with care workers, key industry stakeholders and policy leaders to reach a consensus from which the social care sector can become stronger and more cohesive.
“Care workers nurture and protect the most vulnerable people in our society and they deserve to be recognised and appreciated.”