VAT on sanitary protection

Published Friday, November 6, 2015

This note discusses the way sanitary protection is charged VAT.

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VAT is charged on the supply of all goods and services, unless specifically exempt, either at the standard rate - currently 20% - or the zero rate.  In September 1997 a reduced VAT rate of 5% was introduced on the supply of domestic fuel and power.[1]  Since then the coverage of the reduced rate has been extended to a small number of other supplies including, the installation of energy saving materials (from 1 July 1998), children’s car seats (from 12 May 2001), and sanitary protection (from 1 January 2001).[2] 

Prior to this change there had been a long-running campaign for sanitary protection to be zero-rated, in line with the UK’s practice in zero-rating food, children’s clothing and books. However, the UK’s discretion in determining the structure of VAT, as with all Member States, is limited by European VAT law, and the introduction of a new zero rate would contravene the current agreement on VAT rates.  There is provision for Member States, should they choose, to charge a reduced rate of VAT - between 5% and 15% - on this supply. 

This note gives a short description of these rules, before looking at the Labour Government’s decision – announced in the March 2000 Budget – to take advantage of this provision, and more recent debate over the VAT treatment of these products.

Guidance on the law is given in, HM Revenue & Customs, Women’s sanitary protection products – VAT Notice 701/18/02, July 2011.

Notes:

[1] Initially zero-rated, this supply had been charged an 8% rate from 1 April 1994.

[2] Goods and services charged the 5% reduced rate are listed in schedule 7A to VATA 1994.  Group 4 to the schedule covers women’s sanitary products.

Commons Briefing papers SN01128

Author: Antony Seely

Topic: Taxation

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