Find out which sanitary protection products you can supply at the reduced VAT rate of 5% and how to calculate the VAT due.
This notice cancels and replaces Notice 701/18 (March 2002).
1.1 This notice
This notice explains:
- which sanitary protection products may be supplied at the reduced VAT rate of 5%
- how to calculate VAT due on supplies of sanitary protection products
1.2 Who should read this notice
Use this notice if you’re a manufacturer, wholesaler or retailer of sanitary protection products, including those responsible for accounting for VAT on sales made from vending machines.
2. Products and rates
2.1 Products you can sell at the reduced VAT rate
The reduced rate applies to the supply of any sanitary protection product that is designed and marketed solely for the absorption or collection of menstrual flow or lochia (discharge from the womb following childbirth). Examples include:
- sanitary towels
- sanitary pads
- panty liners that aren’t designed as incontinence products
- sanitary belts for use with looped towels or pads
- keepers (internal devices for the collection of menstrual flow)
- maternity pads for the collection of lochia
If you are a retailer or a distributor and you are in any doubt whether a product is designed solely for the absorption or collection of menstrual flow or lochia, you should contact the manufacturer of the product for clarification.
2.2 Types of sanitary protection products that are excluded from the reduced rate
The reduced rate does not apply to any product that is not designed and marketed solely for the absorption or collection of menstrual flow or lochia. Items that do not qualify for the reduced rate include:
- incontinence products
- clothing or sanitary accessories
- dual-purpose products designed to protect against both menstrual flow and incontinence
2.3 Panty liners
Panty liners designed for sanitary protection, but marketed as also suitable for protection against light incontinence or light feminine discharges, are eligible for supply at the reduced rate. Panty liners designed primarily as incontinence products are not eligible for the reduced rate, but may qualify for a separate VAT relief.
2.4 When VAT relief is available on incontinence products
Incontinence pads are not eligible for sale at the reduced rate under this relief. Incontinence pads and other specially designed incontinence products (including clothing) may qualify to be zero-rated under a separate relief. Further details can be found in Notice 701/7 VAT Reliefs for disabled people.
2.5 Clothing designed for use with sanitary protection products
Items of clothing, such as disposable or protective pants or briefs that either hold sanitary protection in place or protect the wearer from leakage, are not eligible for the reduced rate. Certain items of children’s clothing may be zero-rated under a separate relief. Notice 714 Zero rating young children’s clothing and footwear provides further details.
3. Calculating the VAT due on sanitary products
3.1 Invoiced sales
If you manufacture or distribute sanitary protection products, you should ensure that your accounting systems can distinguish between goods sold at the standard and reduced rates of VAT. Separate summary totals should be produced for supplies at each VAT rate, and these totals should be posted to your VAT account. Detailed guidance on record keeping and the VAT account can be found in VAT Notice 700 The VAT Guide.
3.2 Retail sales
Retailers are required to use one of the VAT retail schemes to calculate the value of their supplies at each rate of VAT. Detailed guidance on retail schemes can be found in the following notices:
- VAT Notice 727: retail schemes
- VAT Notice 727/2: bespoke retail schemes
- VAT Notice 727/3: retail schemes: how to work the Point of Sale scheme
- VAT Notice 727/4: retail schemes: how to work the Apportionment schemes
- VAT Notice 727/5: retail schemes: how to work the Direct Calculation schemes
The relevant notice for each retail scheme contains a step-by-step guide to calculating the VAT that has been charged on any reduced rate sales.
3.3 How to calculate VAT contained within a tax-inclusive price
If you need to calculate the VAT included within a price, you can do this by applying the appropriate ‘VAT fraction’ to the total tax inclusive price. The relevant VAT fractions are detailed below:
|Rate of VAT||VAT Fraction|
|Goods sold at the standard rate of VAT (20%)||1/6|
|Goods sold at the reduced rate of VAT (5%)||1/21|
3.4 Sales from vending machines
If you operate machines that dispense products at different rates of VAT and are unable to identify your total sales at each rate, you should apportion your sales income using a fair and reasonable method. You may, for example, calculate the sales at each rate of VAT with reference to the number of refills made for each item within the relevant period. Where appropriate, you should agree an apportionment method with HM Revenue and Customs (HMRC). Further details concerning methods of apportionment can be found in VAT Notice 700: the VAT Guide.
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