Before Brexit, the UK was unable to zero rate VAT on women’s sanitary products under EU rules and the items were subject to 5% VAT. Following the end of the transition period the UK was no longer bound by the EU VAT Directive which mandated a minimum 5% rate of VAT on all sanitary products, and the VAT charge, known as the ‘tampon tax’, was abolished with effect from 1 January 2021.
The government has now extended the VAT zero rate to period pants. Effective from 1 January 2024, women will save up to £2 on a £12 pair. Many of the UK’s largest retailers including M&S, Primark and Tesco, have committed to pass on the savings, worth 16%. This change was first announced as part of the Autumn Statement 2023 measures after 80 MPs, charities and retailers called on the government to scrap the VAT in August 2023.
The Financial Secretary to the Treasury said:
‘This is a victory for women across the UK and for the campaigners who’ve helped raise awareness of the growing importance of period pants.
It’s only right that women and girls can find more affordable options for what has become an essential and environmentally friendly product.’
Since reforming the ‘tampon tax’, the market for period underwear has expanded and they are now a mainstream choice for many women. The scrapping of the current VAT will ensure that period underwear is treated the same as traditional period products.