This is not a luxury consumer product. This is about fairness, and doing what we can to lower the cost of a necessity. In order to give businesses time to adjust their pricing structure, and retailers time to adapt their accounting systems, the reduced rate will be implemented from 1 January 2001. Customs are consulting trade groups to establish a clear and workable definition of those sanitary products which will be taxed at the reduced rate.
European law allows sanitary products to be taxed at a reduced rate.
The UK has agreed with its European partners not to extend its zero rates beyond those in place on 31 December 1975. Therefore, it is not possible to reduce the rate of VAT on sanitary products to zero. The measure will cost 35 million per year. Others should contact their local VAT Business Advice Centre, listed under Customs and Excise in the telephone book. Other Treasury material can also be found at this address.