27 Aug English carrier bag charge
A charge for single use carrier bags is to be introduced in England. With effect from 5 October 2015, a minimum charge of 5p will be introduced on single use carrier bags supplied. This new charge in England is the equivalent of the levy in place in Wales, Scotland and Northern Ireland.
The charge is expected to dramatically reduce the number of carrier bags used in England and will affect the vast majority of large retailers in the UK. The charge will apply on single-use carrier bags supplied with goods which are provided by, or delivered to, a person in England by suppliers with more than 250 full-time equivalent employees.
The 5p charge is taxable at the standard rate of VAT and therefore a VAT-registered business would charge 4.17 pence plus VAT. Non-VAT registered suppliers must still charge the same minimum amount of 5p. For direct tax purposes, the compulsory charge on single use carrier bags should be brought into account in calculating trading profits. The Government expects the proceeds to fund good causes in England.
There are some exemptions on the requirement to charge, based on bag size, items being carried, certain restricted locations and for specialist bags.