The UK tax code is an absolute unit. At 21,000 pages-plus, some taxation experts believe it to be the biggest in the world.
As an unintended consequence of its ungainly size, the code can sometimes be rather mercurial – and none more so, arguably, than on its pages covering VAT.
For food and drink, this is most obviously illustrated by the years-long debacle over Jaffa Cakes’ VAT status. First, they were 0% rated like all cakes, then they were standard rated at 20% for being chocolate-coated biccies. Finally, zero VAT again for being cake.
Fmcg loo roll tax upheaval expected
More upheaval for fmcg might be ahead. Because Who Gives a Crap, the paper products disruptor, today called on the Treasury to scrap what it calls the “roll tax”. That’s the 20% VAT on toilet tissue.
The DTC brand has made its demand in a submission to the Treasury, ahead of the budget on 6 March. It’s also plopped a Change.org petition online and written an open letter to Chancellor Jeremy Hunt.
An end to the ‘roll tax’ would have little impact on the public purse, claims the brand, because it is “equal to just 0.05% of total tax receipts” annually. For consumers facing the high cost of living, however, a 0% VAT rate would save enough money each year for “five days of household gas and electricity, a month of fresh fruit and vegetables, or six days of petrol and diesel”.
Who Gives a Crap also points to the capricious nature of the VAT rules, which add 20% to the price of loo roll – an essential purchase for more or less everyone – while letting treats like marshmallow teacakes and caviar go scot-free.
Roll tax break could be a win for government
With that inequity in mind, it’s understandable the brand is kicking up a stink. But will the government pay heed given the pile of dung it’s already having to shovel? Well, it should – and for a couple of reasons. First, flushing away that 20% VAT would be relatively easy and voter-pleasing.
Second, this current bunch of policymakers have previous. In January 2021, it officially abolished the 5% ‘tampon tax’ – applying a zero rate of VAT to women’s sanitary products. And only a month ago, it did the same for period pants. (It’s no surprise, then, that Who Gives a Crap’s cause is backed by charities including Bloody Good Period and Freedom4Girls.)
Of course, there’s no guarantee Hunt will extend his largesse to bog paper. If he does, Who Gives a Crap has pledged to pass on the saving to consumers and entreat other paper goods makers to do the same. Good news for those who enjoy a clean botty at a keen price.
If he doesn’t, there will be an opportunity for supermarkets to win a few fans by pressing the issue. They’ve done it before. Remember, for instance, how Tesco cut the price of tampons and sanitary towels by 5% in 2017? And how last August it absorbed the VAT on period pants? Maybe this time it can wipe out the tax on loo roll.
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