Charities are urging the UK government to remove VAT from high-factor sunscreens to encourage wider usage and reduce the risk of skin cancer. Currently, sunscreen is subject to VAT at the 20% standard rate, meaning a sixth of the cost goes to the government. The government can introduce new VAT reliefs under zero rate VAT relief provisions, but granting all requests for new reliefs, including the sunscreen relief, may be financially untenable without increasing tax in other areas. However, there may be financial logic in granting the sunscreen relief by comparing the potential tax saved in paying for reduced cancer treatments. The key challenge is ensuring that high street shops pass on the VAT relief benefit to consumers. One solution could be requiring retailers to provide a retail voucher to customers equivalent to the VAT saving. If charities can secure promises from major retailers to pass on the financial benefit, the government may act on this campaign.
Source RSM
