Significant change on 1 January 2021

With effect from 1 January 2021, VAT on women’s sanitary products has been removed.

The significance of this is greater than may at first sight appear – and not just for the distaff side of the population.

Under EU rules, the lowest permissible standard rate of VAT is 5%.  Until the end of the Brexit transition period the UK was therefore unable to remove the so-called ‘tampon tax’.  Until then, the best the government could do to was to undertake to use the tax collected (apparently some £15m annually) to fund women’s refuges and domestic abuse charities – something it has been doing since 2015.

The key point is that not only is divergence between EU and UK VAT law now possible; the UK government has shown that it is in practice prepared to take advantage of that flexibility where it considers it appropriate to do so to accord with its own domestic priorities and policies.

We are not at present aware that any other changes of this nature are in the pipeline; but it seems likely that as time goes on we shall increasingly see differences at the margins between EU and UK VAT law.

Tax and the UK-EU Trade and Cooperation Agreement

In other news: in the Trade and Cooperation Agreement finalised by the UK and the EU on Christmas Eve, tax is generally conspicuous by its absence.  Although the Agreement does commit both parties to ‘uphold global standards on tax transparency and fighting tax avoidance’ including international standards on exchange of information, there are no provisions directly constraining the UK’s domestic tax regime or tax rates.

Nevertheless, the ‘level playing field’ provisions (and in particular the rules regarding ‘subsidies’ including differential tax breaks), may continue to affect the extent to which the UK is able to introduce tax measures that ‘could have an effect on trade or investment between the Parties’; though it must be said that the text of the relevant chapter of the Agreement seems crafted with impressive and exquisite care to be capable of meaning whatever the reader wishes it to mean…

The full agreement may be found here; those with less stamina may prefer the summary here.

For more information, please get in touch with your usual BKL contact or use our enquiry form.



Sam Inkersole

In 2022, Sam won the Taxation’s Rising Star award at the Taxation Awards in and was named in the Accountancy Age 35 Under 35.

Jon Wedge

While Jon’s client work focuses on the financial services sector, he also oversees the firm’s assurance service, as well as supporting the trainees following in his footsteps.


Elana joined us in 2017 as an ACA trainee, after graduating from Durham University where she had studied languages. She is now a manager in our assurance team.


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