European leaders agree to relax VAT rules to let Britain scrap the tampon tax

A 5 per cent VAT levy is charged on female sanitary products and is administered by officials in Brussels

European leaders have agreed to relax VAT rules to let Britain scrap the so-called 'tampon tax' after David Cameron used a summit on the migrant crisis to plead for permission.

The Prime Minister was forced into the humiliating encounter as he tried to head off a major Commons rebellion by Tory MPs.

He has secured support from all other EU leaders for new flexibility on VAT which would allow the UK to introduce a zero rating on sanitary products such as tampons.

UK officials said that the European Commission has signed up to the change and will put forward proposals next week. 

A formal announcement is expected on Wednesday, though the implementation of new rates may take some time to be approved.

The development came after the Government learnt it was facing a Commons revolt by Tory MPs demanding it acts unilaterally to withdraw the charge - in defiance of EU rules.

Chancellor George Osborne had said he expected an announcement 'in the next few days' on the so-called 'tampon tax'.

But Mr Cameron decided to force the issue by raising it at a summit of the European Council in Brussels, where he first spoke to Commission president Jean-Claude Juncker and then asked fellow leaders to include a commitment in the official conclusions of the two-day meeting.

The 28 leaders agreed unanimously to a statement welcoming 'the intention of the Commission to include proposals for increased flexibility for member states with respect to reduced rates of VAT, which will provide the option to member states of VAT zero-rating sanitary products'.

It came as the 'tampon tax' emerged at the centre of a fresh Tory row over Europe today as scores of Conservative MPs threatened to impose embarrassing amendments to Mr Osborne's Budget.

A 5 per cent VAT levy is charged on female sanitary products and is administered by officials in Brussels. 

As it stands, it means the UK Chancellor cannot decide to scrap the £12million tax raised from the tax and cannot even change the rate at which it is charged. 

Eurosceptic Tory MPs are joining with Labour MPs, who have tabled an amendment to the Commons vote on the measures set out in yesterday's Budget.

If successful, the amendment would mean the 5 per cent sanitary product tax could be struck off the Budget resolutions - but that would break EU rules. 

David Cameron has secured support from all other EU leaders, including German Chancellor Angela Merkel (right) for new flexibility on VAT which would allow the UK to introduce a zero rating on tampons

UK officials said the European Commission has signed up to the change and will put forward proposals next week. Mr Cameron decided to force the issue by raising it at a summit of the European Council in Brussels

It would give Brexit campaigners a powerful example of how the UK is constrained by the EU and left powerless to change even the smallest changes to VAT. 

However Mr Osborne said this morning that Britain was on the verge of a deal with Brussels which would allow it to scrap the 'tampon tax', although there was originally concern that opposition from the French could have scuppered the plans. 

In yesterday's Budget he admitted he could not scrap the 'tampon tax' but pledged to allocate all the £12million revenue from the levy to women's charities such as Breast Cancer Care and the White Ribbon Campaign, which helps victims of domestic violence. 

A petition calling for an end to the tampon tax has attracted more than 300,000 signatures. 

Labour MP Paula Sherriff, who tabled the amendment, said the levy on female sanitary tax was a 'tax on women'.

'The fact that tampons are taxed at 5 per cent suggests they're a luxury item. I can't think of anything less luxurious,' she said. 

Tory Eurosceptic MP Anne-Marie Trevelyan said she was joining the rebellion against the continued 5 per cent 'tampon tax' because it was a 'fundamental' breach of British sovereignty that the Chancellor was poweless to act on the issue. 

George Osborne (pictured visiting a school in Yorkshire this morning) said that Britain was on the verge of a deal with Brussels which would allow it to scrap the 'tampon tax', although opposition from the French may scupper the plans

Superdrug has devised this Inforgraphic detailing where is most affected by the tampon tax with Hungary paying the most in VAT

'The people we elect should be responsible for setting the taxes in this country – not unelected EU judges and bureaucrats,' she said. 

'It is a fundamental principle of democracy that there should be no taxation without representation, which is what we now have.'

'Our Chancellor is unable to take this decision that will benefit women because VAT is controlled by the EU. The only way to get this change is to Vote Leave on 23 June.' 

Mr Osborne will be relieved that Brussels has granted an opt-out for Britain to scrap the levy ahead of a vote by MPs on the Budget measures next week.

John Bercow, the Speaker of the Commons, will decide whether to accept the amendment for the vote on March 22. 

But it may not be necessary now that Mr Cameron has won agreement from Brussels. 

Speaking this morning, Mr Osborne said: 'I perfectly understand people's anger at paying the tampon tax.

'I said we would get agreement that we could reduce this rate to zero. I think we are on the verge of getting that agreement. I think we are going to get that agreement in the next few days, we hope.'

Ukip leader Nigel Farage said Britain had been reduced to pleading on its knees for permission from 'unelected bureaucrats' to remove the tax.

Mr Farage told ITV News: 'Isn't that wonderful? We have begged for crumbs from the table and for once we have got some. It's pathetic for our country to have sunk to this level.'