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The government confirmed its plans to introduce a drink deposit returns scheme for bottled and canned drinks in the recent Budget.
HMRC is consulting on the draft regulations on accounting for VAT when deposits are charged under statutory deposit schemes. They will provide for the exclusion of the deposit from the taxable amount when qualifying sales are made, and require that VAT is only accounted for on the deposits of drink containers that are not returned.
They also establish who must account for that VAT and provides for regulations to be made to establish when and how they must do so.
Views on the draft regulations should be emailed to drs.consult@hmrc.gov.uk by 17 May 2023.
