‘Tampon tax’ abolished as VAT is scrapped on sanitary products
The 5% rate of VAT on sanitary products was abolished on 1 January 2021, with sanitary products now having a zero rate of VAT.
The government said the move was part of wider action to end ‘period poverty’ which includes the roll out of free sanitary products in schools, colleges and hospitals.
The move was made possible by end of the Brexit transition period and freedom from EU law mandating VAT on sanitary products.
Chancellor Rishi Sunak said: “I’m proud that we are today delivering on our promise to scrap the tampon tax. Sanitary products are essential so it’s right that we do not charge VAT.
“We have already rolled out free sanitary products in schools, colleges and hospitals and this commitment takes us another step closer to making them available and affordable for all women.”
The chancellor announced in the March 2020 Budget that the tampon tax was to be abolished from 1 January 2021.
Felicia Willow, chief executive of the Fawcett Society, said: “We warmly welcome the scrapping of VAT on all sanitary products from 1 January 2021 and congratulate the government on taking this positive step.
“It’s been a long road to reach this point, but at last the sexist tax that saw sanitary products classed as non-essential, luxury items can be consigned to the history books.”
The UK government established the Tampon Tax Fund in 2015 to donate money to charity equivalent to the amount of VAT revenue collected, with £47m donated since then to charities working with vulnerable women and girls.
The zero rate for sanitary products was legislated for in the Finance Act 2016, enabling the change to come in to force as soon as the UK has discretion to do so under its legal obligations.
The government estimates the move will save the average woman nearly £40 over her lifetime, with a cut of 7p on a pack of 20 tampons and 5p on 12 pads.
In November 2020, MPs in Scotland voted to make sanitary products freely available to anyone who needs them. The Sanitary Products (Free Provision) (Scotland) Bill will cost an estimated £9.7m.