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The bagging area

27 October 2015 / Helena Kanczula
Issue: 4524 / Categories: Comment & Analysis
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Advice on how to avoid unexpected tax problems with the new charges for single-use carrier bags.

KEY POINTS 

  • A minimum 5p compulsory charge for “single-use carrier bags” applies in England from 5 October 2015.
  • „„Exemption from the charge for small and medium-sized suppliers.
  • „„Annual reports must be made from 31 May 2016.
  • „„Although this is a statutory charge VAT will apply.
  • „„Profits are expected to be donated to good causes.
  • „„Corporates may need to consider donation timings to avoid a loss of tax relief.

Recent press reports suggested that 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 from 5 October 2015 would cause chaos at checkouts. This was perhaps an exaggeration. However the reporting requirements additional costs and risk of penalties associated...

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