Whether you’re shopping for handbags, glad rags or doing your weekly grocery shop make sure you don’t forget to take a carrier bag with you to avoid being charged for a single use carrier bag. And if you’re a retailer then you need to make sure you’re aware of the tax implications for your business of the English retailers’ carrier bag levy which was introduced on 5 October 2015. HMRC has said that like the Welsh ‘carrier bag levy’, but unlike the slightly different Northern Irish scheme, where the minimum 5p levy is treated as outside the scope of VAT unless a greater sum is charged, the charge on single use plastic carrier bags will be subject to VAT, and the charges will form part of the business’ trading income.
This means that retail businesses must include the charges for single use bags in their retail scheme calculations and account for VAT, 0.83 pence per bag if the minimum 5p is charged, on them. Under the scheme, larger retailers, those with 250 full time or equivalent staff, must charge a minimum of 5p for each single use carrier bag that they provide subject to exceptions, for example, for bags containing uncooked meat, fish and poultry products, etc. Guidance for retailers on the operation of the scheme, including details of which bags are subject to the levy and the penalties that can be imposed for non-compliance with it, was published by DEFRA earlier in the year. For further information or to discuss the tax implications of the levy on your business contact the Bedrock team to find out more hello@bedrocktax.co.uk
