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The carrier bag tax

It's just over four weeks since the introduction of the minimum 5p compulsory charge for "single-use-carrier bags" on the purchase of goods at larger shops and stores in England.

We have been slow in introducing this charge. Wales started charging for carrier bags in October 2011, Scotland in October 2014 and Northern Ireland in January 2015.

Interestingly, I have been asked more questions about this tax than probably any other, so I thought it may be worthwhile to ignore the technicalities for once and highlight some of the more interesting parts of the (English) legislation.

  • The government only "expects" businesses to voluntarily donate the profits they make from the charge. There is no legal obligation to donate the money to charity.
  • Businesses must provide Defra with information on what they do with the proceeds. Defra will publish its findings.
  • Small businesses (those who employ less than 250 people) are exempt from the charge, although they may charge for bags if they wish.
  • Small businesses do not have to supply any information to Defra.
  • The 5p charge includes VAT so the government receives 0.83p per bag which is "expected" will go to good causes.
  • Consumer research suggests that the average household already has 40 bags around the home.
My thanks to Taxation magazine for allowing me to be seen as a carrier bag tax expert.




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Days to January 31st