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Everyone is piling in on the govt on its abolition of VAT on tampons.. a few thoughts from a former (very former) HMT official
when the UK joined the EU we were allowed to retain zero rating on items that had not been subject to tax previously. But we were not allowed to introduce any new ones. And any decision to end zero rating was not reversible
as a young HMT official in the 1980s I had to sign off lots of letters arguing that we didn't zero rate other sanitary products that men used (soap? shaving foam? Brut?) -- but we could always blame the EU.
we also used to have a big line to parents of oversized children who were aggrieved that their kids' clothes did not qualify for the VAT zero rate. I think its hugely regressive. Abolish and stick the revenue in child credit/benefit...
that is why govts cd never introduce a zero rate on sanitary products - and why once they had decided to apply VAT to fuel and power Gordon Brown could reduce it to the minimum allowable reduced rate but not to 0%
for years UK governments resisted introducing a reduced rate band of VAT - so the choice was either zero rates or the standard rate - but other countries did have reduced rate bands.
for a long time the EU restricted what govts could put in the reduced rate band ( did not want tax to generate lots of x-border shopping flows) and for reasons I could never understand banned any country introducing a super rate of VAT
Tried to get the then Chancellor to oppose that when I was doing tax policy at HMT - but (even though a eurosceptic) he refused as it would lead to accusations govt had secret plans...
But the EU is now relaxing its rules on what you can reduce rate - and is allowing a third reduced rate band - of 0-5% - so from 2022 the CX could have moved sanitary products down
of course its a historical accident that UK had a rather primitive attitude to sanitary products - may be reflecting the dearth of female ministers and senior officials at HMT in the 1970s when VAT was introduced..
But the CX may find his new found freedom is a pain rather than a pleasure.. its very easy to resist lobbies to reduce/zero rate everything that moves with a "I would, but the EU....." Chancellors will now have to explain why they won't move..
Particularly important when at some point the Chancellor will need to raise taxes.....but he will at least be able to compensate by that super VAT rate.. maybe start with SUVs? VAT'S ENOUGH.
