The so-called "tampon tax" on women’s sanitary products will be used to provide £15m a year of grant funding for women’s health and support charities, the Chancellor has announced.
Presenting his autumn statement, George Osborne told MPs the £15m raised every year from VAT on women’s sanitary products would be used to support good causes.
The government’s tampon tax decision and a further announcement that sixth-form colleges could avoid VAT by becoming academies could have wider implications for charities, the Charity Tax Group said.
John Hemming, chair of the CTG, said the fact the government was actively seeking to abolish the tampon tax and was allowing sixth form academies to avoid VAT indicated there "may be room for negotiation on new zero rates (including possibly charity zero rates) in the ongoing European negotiations".
The CTG has long been campaigning for charities to be required to pay less VAT.
The pledge to redistribute tampon tax proceeds follows a Change.org petition to abolish the tax entirely. It has been signed by almost 300,000 people.
The tampon tax was originally reduced from 17.5 per cent to the current rate in 2000, although the government was unable to persuade the EU to change its laws and abolish the tax entirely.
The first £5m from the tampon tax will be split between four charities: the gynaecological cancer charity The Eve Appeal; domestic abuse charities Safe Lives and Women’s Aid; and breast cancer charity The Haven.
Osborne invited further bids from other women’s charities. He also confirmed the government remained committed to change EU rules on taxing sanitary products.