Budget 2020: Tampon tax expected to be cut as Chancellor seeks to protect the future of cash
The tampon tax is expected to be abolished in next week's Budget a move that would save the average woman in the UK £40 over her lifetime.
Chancellor Rishi Sunak is planning to announce next Wednesday that he will cut the VAT on sanitary products to zero.
The unpopular tax will end with the Brexit transition period at the close of the year, cutting the price of a pack of 20 tampons by 7p and 5p on 12 pads from January 1 2021.
EU law has so far prevented member states from reducing the rate below 5%, which means tampons and pads are treated as luxury items and not essentials.
Critics have long argued the levy contributes to period poverty where sanitary products are pushed out of reach because of their cost.
In the UK, one in 10 girls cannot afford to buy menstrual products, while one in seven have struggled to afford them, according to research by Plan International.
The UK currently uses the revenues raised through the tax to fund charities which aid vulnerable women, with £62 million having been allocated since the scheme was launched in 2015. The Treasury has not said whether the fall in funding will be matched by other means.
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In his first Budget as chancellor, Mr Sunak is also poised to commit to new laws to protect the future of cash to ensure the two million people in the UK who rely on notes and coins, including vulnerable groups and local communities across the UK, have access to it.
Three in 10 payments are still made using notes and coins, but the closure of many bank branches and free-to-use ATMs has fuelled concerns about people's ability to continuing accessing cash.
The Treasury is expected to start talks with the industry and regulators - the Bank of England, Financial Conduct Authority and Payment Systems Regulator - around legislation immediately after the Budget next Wednesday.
Handing watchdogs new powers to ensure banks continue to properly support their customers' cash needs is one option under consideration.
The Treasury also wants the banks to create a new system for moving money around the country, so cash remains accessible for those who use it every day.
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The finance industry has set up various schemes to help fill gaps in cash access, but many have argued that legislation is needed to protect the long-term future of paper money.
ATM network Link has committed to replacing protected cash dispensers where there is no free machine or Post Office counter within one kilometre.
It also recently set up a "request an ATM" service, allowing communities to directly ask for a machine to be installed in their area.
The commitment to legislation builds on government efforts to protect cash, including investing £2 billion since 2010 to ensure everyday banking services, such as the ability to deposit and withdraw cash, are available at the Post Office's 11,500 branches across the UK.
Consumer group Which? recently wrote to Mr Sunak calling for legislation that protects cash for as long as it is needed.
The letter read: "In the past two years, 9,000 free cash machines and 1,200 bank branches have vanished.
"We're even being charged a fee to access our own money at 25% of the cash machines that remain...
"If things carry on as they are, cash as we know it will cease to exist in just two years."
Similar calls have come from the business sector, with the Association of Convenience Stores, the British Retail Consortium (BRC) and the Federation of Small Businesses urging the Chancellor to secure long-term access to cash across the UK.
BRC head of payments policy Andrew Cregan said earlier this week: "Cash accounts for almost 40% of retail transactions and is important to many vulnerable people, especially as a tool for budgeting and control."