If a bookshop provides carrier bags to customers at a charge of 5p per bag would the bags be VATable?
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Yes, probably
Books are zero-rated and carrier bags would be standard-rated. If the supply of the bag was ancillary to the sale of the book, it might be possible to zero-rate the 5p. However, if they are being charged for it, I assume that not every customer will want a bag, so I think that the sale of the bag is separate to the sale of the book and VAT should be paid out of the 5p.
Interesting...
I imagine the bookshop pays VAT when it buys them, I don't see why they shouldn't charge VAT on their sale.
But the word 'bag' doesn't appear in 7A, 8 or 9, so I'm not sure!
is it a sale?
sounds more like an environmental levy (tax) to me. Although tax on taxes is nothing new. How about a (charity) collecting tin on the counter - and make it a voluntary contribution.
Yes
See HMRC Brief 23/11 regarding the treatment of the 5p levy introduced by the Welsh Assembly on 'single-use' carrier bags. ´
It is unlikley that HMRC would accept that the bag would be zero-rated as part of the supply of a zero-rated book as the purchase of the bag is presumably optional.
HMRC have addressed the issue in Wales.
Have a look at Revenue and Customs Brief 23/11.
The position is slightly different in Wales, but the principle that Euan suggests, i.e. that the bag is supplied separately from the goods inside it, is being applied
so HMRC have addressed the issue
and unsurprisingly their view is that it is vatable. That is such a big surprise!!!!!!!!!!!
Listening between the lines on this on the Today programme this morning, it would seem the Welsh carrier bag levy is supposed to be a compulsory levy, but largely unenforceable. And they are expecting the proceeds to be (voluntarily) donated to charity. So if you collect it seperately for identifiable charities then I don't see how it can be a taxable supply.