Rishi Sunak abolished the 5% VAT rate on tampons when he was chancellor and the change came into effect from 1 January 2021. But Dan Neidle, founder of the nonprofit consulting firm Tax Policy Associates, which produced the survey, says retailers appear to have kept the money instead of passing it on. “At most, tampon prices fell by about 1 percent,” Neidle said, “with the remaining 80 percent of the benefit retained by retailers. Retailers probably got all the benefit, to the tune of £10m a year.’ At the time, the Treasury said ending the tax would cut every pack of 20-section tampons by 7p and every pack of 12 sanitary napkins by 5p, saving the average woman £40 over her lifetime. However, it was up to retailers to implement the cut and pass the savings on to customers. Laura Coryton, who launched the Stop Taxing Periods campaign which helped change the policy, described the report as “shocking” and said she was considering launching another petition. Office for National Statistics (ONS) data was used to analyze price changes before and after the tampon tax ended. Tampons are in the basket of goods used by the ONS to track the cost of living, but not other period products. The researchers compared changes in the price of tampons with those of 13 similar products, including tissues and nappies, over several years before the tax was removed and up to March this year, when inflation began to accelerate. “If the benefit of removing VAT was passed on to consumers, we would expect to see a significant divergence between price changes in tampons and price changes in other products,” said Neidle. “We do not.” Overall, the average after-tax price was about 1.5 percent lower than it had been before, the researchers found. “Our analysis is of ONS data across all retailers as a whole,” Neidle continued. “It is therefore possible that some retailers passed on the benefit of the VAT cut and provided lower than average prices. This would, however, mean that other retailers provided higher prices.” Coryton said the report showed women had yet to reap the benefits of the tax cut, as period goods manufacturers had “eaten up the price cut”. “It’s time for retailers to do the right thing, stand with their customers and cut their prices in line with the tampon tax axe. “The 300,000 people didn’t sign my petition to make the retailers richer,” he said. A government spokesman said: “We have kept our promise to scrap tampon tax to make sanitary products more affordable and are urging retailers to pass the savings on to shoppers.” Subscribe to Business Today Get ready for the business day – we’ll point you to all the business news and analysis you need every morning Privacy Notice: Newsletters may contain information about charities, online advertising and content sponsored by external parties. For more information, see our Privacy Policy. We use Google reCaptcha to protect our website and Google’s Privacy Policy and Terms of Service apply.
Tampon prices
The low rate of inflation makes comparisons with today’s prices difficult. A snapshot of supermarket pricing shows a pack of 14 Always Sensitive pads still costs 95p, the same as in 2020, based on the average price between Tesco, Sainsbury’s, Asda and Morrisons, according to data firm Assosia. Two years ago a pack of 20 supermarket label tampons cost 93p and the price was the same in November last year, but today they cost 3p. On the same basis, a pack of 14 extra regular pads cost 65p in 2020 , rose by 2 to 67p in 2021 and now costs 70p. Meanwhile, at £2 a pack of 18, Tampax Compak super plus tampons are 15p or 7% cheaper today than they were two years ago. Tesco, the UK’s biggest retailer, said it had pre-empted the tax change by cutting the price of its hygiene products in 2017 and showed seasonal own-brand products starting at 40p for a pack of 10 towels. “Tesco was the first retailer to cover VAT on toiletries in 2017,” a spokesman said. “When we made this decision, we immediately reduced the price of these products by 5% to ensure our customers could benefit.” Boots also said its shoppers had benefited from the removal of the tax. “In January 2021, we reduced the price of our period products by 5% to reflect the VAT changes for this category, passing the savings on to customers,” it said.
