Tampon tax isn't the only way you're being ripped off by VAT

Tampon tax more VAT loopholes

The tampon tax has hit the news recently, bringing to light the fact that people are paying 5% extra to the Government for something they can’t really avoid buying. VAT on sanitary products was set at 17.5% between 1973 when the tax came in, and 1998 when Gordon Brown slashed it to 5%, but a recent petition with over 320,000 signatures brought the existing tax back to the attention of the treasury. In last month’s budget, George Osborne announced that it was going to be abolished.

How much will the tampon tax slash really save you?

This tax cut will only save you around 10p per box of tampons, (based on Tesco’s price for a box of 20 Tampax Compak), so it’s going to take a while before you feel the benefit - you’d have to get through 400 tampons before you’d have saved enough to buy a 200g bar of Dairy Milk.

However, tampons are hardly the only things being taxed at a “luxury” rate. You’re being charged a whopping 20% VAT on things as essential as suncream and although it’s at a reduced rate it’ll also cost you 5% for over the counter contraception like condoms or the morning after pill.

What’s even crazier is the list of things that are zero-rated (you can see the full list here), it includes everyday essentials such as helicopters, gambling, and exotic meats like crocodile. It’s almost as though these rules were set by a jet-setting baccarat fan who sits down on Sunday for a roast reptile dinner.

Eating VAT-free

When it comes to food, the rules get even weirder, why for example do we get charged 20% VAT on crisps made out of potato, but crisps made out of corn or maize like Doritos or Skips are zero rated? The makers of Pringles (less than 50% potato) even appealed to HMRC that they should be classed as a non-potato crisp, and lost. There have been similar legal battles about whether Jaffa Cakes and marshmallow teacakes are in fact, cakes rather than biscuits - they’re both cakes if you’re interested. McVities even baked a huge Jaffa Cake to prove they’re actually cakes, and it won them the right to be zero rated.

Don't anger the Cornish

Back in 2012 Greggs and other purveyors of pastry campaigned against the so-called “Pasty Tax”, an extension of the VAT rule that hot takeaway is taxed at 20%, whereas cold takeaway food is zero rated which explains why toasties are more expensive than sandwiches. The Pasty Tax was an attempt to change the rule, so that “cooling” food that is not necessarily meant to be eaten hot, like pasties, would be taxed as hot food instead of cold. The tax was eventually abandoned due to public outcry, it seems as though people really, really love their pasties.

Use VAT loopholes for your own gain

We’ve written before about how buying children’s shoes and clothing can save you money, but you can use this trick on other things too:

Go for nuts still in their shells, it’ll take you a bit longer to eat them, but you won’t be paying VAT.

Buy cotton buds and cotton wool from the baby aisle in the supermarket rather than the ones placed next to makeup wipes and cleanser.

Get biscuits without chocolate on them, the additional topping classes them as a “luxury biscuit” and adds VAT, a 300g pack of plain Hobnobs costs £1, but a 262g pack of chocolate Hobnobs will set you back £1.50. Alternatively, go for chocolate covered “cakes” like Jaffa Cakes or Tunnocks Tea Cakes, which are zero rated.

If you’re buying dried fruit, get it from the baking section rather than snacking, and save yourself 20%.

Fed up of being bled dry by the government? Why not check out our free stuff section, or the best list on the internet for freebies you can pick up on your birthday?