Children's facemasks are zero-rated for VAT: they are 'clothing', according to HMRC's Revenue & Customs Brief 11 (2022): ‘VAT and children’s face masks’. This sets out HMRC’s revised position in relation to children’s face masks and their VAT treatment.
Having reviewed the evidence available about the continued and widespread use of face masks, HMRC now accept that they should properly be considered to be items of clothing.
As a result:
- The supply of face masks designed and marketed as suitable for young children (under the age of 14) can be zero-rated for VAT under Group 16, Schedule 8, VATA 1994.
Businesses that have standard-rated such sales previously can reclaim the associated VAT by following the guidance for Correcting VAT errors.
- Revenue & Customs Brief 11 (2022) should be quoted on any VAT652 or claim letter.
- Penalties can be charged where reasonable care is not taken when calculating any claim.
Useful guides on this topic
Correcting VAT errors
What are the VAT error correction time limits? Can you correct errors through the VAT return? Do you have to notify HMRC?
Reclaims and unjust enrichment
When can VAT reclaims be made? What are the time limits? What is unjust enrichment? Why might unjust enrichment prevent HMRC making VAT repayments?
When do penalties apply for VAT? What penalties are charged and how can they be mitigated?