Friday, 26 June 2015

Why the government CAN'T use the zero VAT rate on sanitary products no matter how many petitions you sign

I worked in VAT for four years of my life. I qualified as a tax advisor. I know, it makes me sound like the most boring person on the planet. In reality, I was the most bored person on the planet - and that is why I quit, promising myself vaguely never to think about VAT again unless it went up to 500% or something in which case I might join in a protest. 

And predominantly, I have kept that promise. It isn't that difficult, seeing as most VAT cases involve things like 'should banks pay VAT on financial transactions?' or 'is a Subway actually served hot or cold?' and those things do not exactly feature highly in my every day life. However, recently, more and more, a little campaign has been forcing my VAT knowledge to wiggle its way to the forefront of my brain. And that campaign is this one:


http://metro.co.uk/2015/02/17/poll-should-women-have-to-pay-tax-on-tampons-5066401/
 
Essentially, sanitary products currently attract the reduced rate of VAT – 5%, in the UK; so you pay a 5% increase on the price, essentially. Unlike, say, contraception, which is zero-rated – in other words, the government don’t make any money when you buy a box of Durex, but they do when you buy a packet of Always.  


Feminists are all up in arms about this issue because everybody should have the right to sanitary products and oh my god how dare the government profit from this and why can’t somebody DO something will you sign this petition please? 

Now look. I agree one hundred percent that sanitary products should be available to everybody – nobody should be like, bleeding in the street. And to be honest, I always assumed you could go into a family planning clinic or a doctor’s and pick them up if you wanted to, just like you can with condoms; it appals me that this is not the case. This is what we should be campaigning for; free sanitary products for those who need it. 

But instead the campaign has focussed on cutting the VAT rate. Zero rate sanitary products, people are arguing, and make them cheaper for everyone; it’s just fairer. Right? Sure. So what’s the problem? 

The problem is the government can’t

When we signed up to the EU, WAY BACK WHEN it was called the ECC or something and everybody was busy arguing about the Euro vs the Pound and English sovereignty and whether or not everyone from Poland was going to move in, we signed up to a homogeneous VAT rate. The idea is that, slowly, everyone in the EU follows the same VAT rules. There is now EU VAT law which takes precedent over UK law. It doesn’t mean we can’t make our own laws; just that they need to fall in line with what everyone else is doing. Still with me? 

OK, so when we signed up to this, there was a problem. The UK is the only country in the EU to have a zero rate. All other countries either reduce-rate products (with their idea of a ‘reduced rate’ ranging from 2% to like, 15%) or exempt them, which trust me, is a whole other kettle of fish. The UK wanted to hold onto the zero rate – on important things, like, erm, FOOD – and the EU wanted to take it away. We reached a compromise; we could keep the zero rate, but only on products that were already zero-rated. We can’t add anything to it. Nothing. Not a dime. That’s why companies go to court to find out if a jaffa cake is a biscuit or a cake; we can’t just say ‘oh, it’s a cake, but whatever, zero-rate it anyway.’ We need to know or we get in a whole lotta trouble. 

Back in the day, I guess, nobody had thought to zero-rate sanitary towels, and that’s bad, but you know – people in the 1970s, not exactly known for being anti-sexism. We signed up for their rules, and now we’re stuck with them. 

OK, we could potentially zero-rate sanitary products by leaving the EU; in my opinion, that’s a bit like getting rid of a spot by setting your entire face on fire, but hey, if it’s what you’re arguing for, then fine – just be aware that’s what you’re arguing. You can’t just say ‘hey, David Cameron, change it!’ He can’t. He doesn’t have the power, no matter how many people sign a 38 degrees petition.
I know this might be completely boring to some people but I just wanted to make the point that sometimes, the government aren’t screwing us over. Not often! But sometimes.

And now I’m going back to not thinking about tax. Phew. Thank god that's over. Anyone for a jaffa cake?
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