Government Response

The Government responded to this petition on Tuesday 22nd September 2020

The new zero rate of VAT on Women’s Sanitary Products covers all those products which are currently taxed at 5 per cent, designed or marketed solely to protect against menstrual flow and lochia.

The introduction of a zero rate in respect of Women’s Sanitary Products (WSPs) has been made possible by the departure of the United Kingdom from the European Union. Parliament has already approved the move to a zero rate and included a provision in Finance Act 2016 allowing the change to come in to force as soon as the UK has discretion to do so under its legal obligations. The Government will accordingly be able to apply the zero rate from the 1st January 2021, once the transition period has ended. This was confirmed by the Chancellor of the Exchequer during the presentation of his March 2020 Budget.

The scope of the new zero rate is defined by the existing 5 per cent reduced rate applied to WSPs, which covers the supply of any sanitary protection product that is designed and marketed solely for the absorption or collection of menstrual flow or lochia. This relief specifically excludes articles of clothing such as “period pants”.

Such exclusions are designed to ensure that the relief is properly targeted, since difficulties in policing the scope of the relief create the potential for litigation, erosion of the tax base and a reduction in revenue. However, “period pants” may qualify for the zero rate when designed for children under the age of 14 years old providing they meet certain maximum sizing limits.

Although the Government regularly receives requests for reduced or zero rating on a wide range of products, VAT is designed as a broad tax on consumer expenditure, and reliefs from the standard rate have to be strictly limited. As Budget 2020 acknowledged, VAT makes a significant contribution towards the public finances. VAT raised around £130 billion in 2019/20 and helps fund the Government's priorities including on health, schools, and defence. Nevertheless, the application of VAT is kept under constant review. Even though period pants may find they do not qualify, the new zero rate will ensure that every woman that needs sanitary protection during their monthly cycle will, from the start of January and for the first time, have access to a variety of zero rated products on which they had previously paid a 5 per cent rate of VAT.

HM Tresuary