Removal of VAT on period pants, a triumph for menstrual equality or is it just PANTS?

In a landmark move towards menstrual equality the UK Government has recently removed VAT on period pants.

This marks a significant step forward in the fight against period poverty and helps to ensure access to essential menstrual products for all. This recent move is expected to have a profound impact not only on consumers but also on the suppliers and manufacturers of period pants in the UK.

So, is the removal of VAT on period pants a triumph that women over the UK should celebrate or is it just pants?

The decision to remove VAT from period pants comes as part of a broader initiative to address the economic challenges faced by individuals menstruating and make menstrual products more affordable and accessible. Previously, period pants were classified as a non-essential luxury item, attracting a 20% VAT, which disproportionately affected those who menstruate and were struggling with the financial burden of purchasing these products.

What impact will the removal of VAT on period pants have on consumers?

The elimination of VAT on period pants is a significant win for consumers, particularly those who have long advocated for the removal of financial barriers to menstrual hygiene. With the cost reduction resulting from the VAT removal, period pants are likely to become more affordable, contributing to greater accessibility and inclusivity for individuals from all socio-economic backgrounds. This move aligns with the broader global movement to ensure that menstruation is not a barrier to education, work, or participation in daily life.

What impact will the removal of VAT on period pants have on suppliers?

While consumers stand to benefit from the removal of VAT, the impact on suppliers and manufacturers of period pants is noteworthy. Initially, some concerns were raised about the potential economic strain on businesses due to reduced profit margins. However, many industry experts argue that the increased demand resulting from lower prices may offset the impact on profit margins, leading to an overall positive outcome for suppliers.

Additionally, the removal of VAT on period pants may encourage more manufacturers to enter the market, fostering competition and further product innovation. As the industry expands, suppliers may explore new materials, designs, and technologies to differentiate their products, ultimately providing consumers with a wider range of options to choose from.

Will the removal of VAT in the period pant market encourage growth and innovation?

The removal of VAT on period pants is likely to stimulate market growth, attracting more consumers who were previously deterred by the higher costs (assuming the suppliers pass on the VAT saving – of course they could keep the retail price the same to increase their margins). An alternative consequence could be that a surge in demand could lead to increased production and economies of scale, enabling suppliers to maintain or even enhance their profit margins despite the absence of VAT.

Furthermore, the elimination of this tax may encourage innovation within the industry. Suppliers may invest in research and development to create more sustainable and environmentally friendly period pants, aligning with the growing global awareness of eco-friendly menstruation options.

Furthermore, those suppliers that enter into research and innovation in the sector will also want to consider their eligibility to claim Research and Development Relief. There are many qualifying criteria that suppliers will need to consider, but this is certainly an area where professional advice from an R&D expert is essential. A successful R&D claim can result in a significant injection of funds for a business.

We asked our VAT expert, Kelly Eland, for a comment “In principle, VAT is applied to the supply of all goods and services in the UK. There are exceptions to this principle, largely driven by social, economic or political motives. Sometimes innovation and development of new products results in the VAT legislation taking a while to catch up. The removal of VAT on period pants in the UK is most certainly a step in the right direction and something women across the UK should be celebrating. The wider-reaching implications however go beyond the immediate 20% reduction to account for the VAT. For consumers, suppliers, and the industry as a whole, by making menstrual products more affordable and accessible, the UK government has demonstrated a commitment to addressing period poverty and ensuring that individuals who menstruate have the dignity and freedom to manage their periods without financial constraints. As the market evolves further in response to these changes, it is anticipated that suppliers will adapt, innovate, and contribute to a more inclusive and sustainable menstrual product landscape in the UK and this is something that again, we should be celebrating.  So, ladies across the UK, business owners in the period pants sector, importers of period pants, celebrate, keep innovating and let’s celebrate this move together”.

If you would like to speak to a VAT expert on any area of VAT and how this is applies within your business or to your services or products, contact us today on 020 7870 9050. Our VAT team has a wide range of expertise and this includes areas such as how VAT is applied to property and construction, UK VAT for overseas businesses, VAT within the financial services sector, and the application of VAT on education, childcare and social care.

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