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The future is written in carrier bags

5th Oct 2015
Tax Writer Taxwriter Ltd
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Rebecca Cave explains how the new carrier bag charge is just the beginning of the tax strife. It’s all due to the devolution of tax powers.

From 5 October 2015, shoppers in England have to pay at least 5p for each new plastic carrier bag they acquire. This apparently puts them in the same position as shoppers in Wales, Scotland and Northern Ireland, who have being paying for their carrier bags for some years (just under 12 months in Scotland).

However, as the rules concerning carrier bag charges were drawn-up by the devolved administrations, those rules differ in every country within the UK, even the VAT treatment of the charge is not the same!

In England the carrier bag charge applies to “single-use” plastic carrier bags which are 70 microns thick or less. In Wales, Northern Ireland and Scotland the charge applies to all single-use carrier bags, including those made of paper. In Scotland the charge includes bags made of other materials such as hessian, but in Wales bags made of hessian, cloth, jute and cotton are exempt from the charge.

In England only retailers who have 250 or more full-time employees (or equivalent) are required to charge customers for each bag, but in the other countries all retailers must levy the charge for new carrier bags.

There are circumstances in which the carrier bag charge does not have to be levied, such as when buying loose fruit, potted plants or medications, but only when the contents of the bag consists entirely of the exempt items. Of-course the list of exempt items is slightly different for each country. For example in Northern Ireland the charge doesn’t apply when buying take-away hot food and drinks  

Note that it is a “charge” not a “tax”. The levy is there to encourage customers to reuse bags they already have and hence reduce the number of discarded bags in the environment. So where does the money go?

In Scotland, Wales and England retailers can keep the carrier bag charge if they wish, having paid over the VAT portion of the charge (0.83p) to HMRC. They are encouraged to donate the net amount to charities or good causes, but they are not obliged to. In Northern Ireland the retailer must pay 5p of each bag charge to the Department of Environment, but there is no VAT to account for. 

So there you have it; the same charge per bag in every country, but not on the same type of bags, in the same circumstances, or even with the same VAT implications.

Just imagine what will happen when further tax powers are devolved to the regional administrations. Scotland already has its own land taxes: LBTT and landfill tax. From April 2016 it will impose the Scottish rate of income tax (SRIT) on Scottish residents. The Corporation Tax (Northern Ireland) Act 2015 gave the Northern Irish Assembly the power to set a different rate of corporation tax on trading income. Wales is drawing up plans for its own SDLT and landfill tax – as proposed in the Tax Collection and Management (Wales) Bill.

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Replies (53)

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By dialm4accounts
05th Oct 2015 13:59

Good grief

You couldn't make it up.

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By petersaxton
06th Oct 2015 08:42

Myleene Klass said: “You may as well just tax me on this glass of water. You can’t just point at things and tax them.”

I know it’s not a tax but it has a similar principle.

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By ireallyshouldknowthisbut
06th Oct 2015 12:08

.

Hmm all this sort of crazy cross border rules reminds me why there once were some people who thought it would be great if the rules across the whole of Europe were all much the same to make trading easier between states. 

For some reason we now seem to be travelling fast in the opposite direction with everything broken up and complicated in the name of devolution. 

There seems to be no conceptual reason for any of this, just base politicking driving policy. 

So much for 'cutting red tape'.

 

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By listerramjet
07th Oct 2015 11:05

@ireallyshouldkn - problem is, those jobsworths in EU whatever institutions are much more experienced in making up stupid rules, and without the pain of democracy to bring them back into line.

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By listerramjet
07th Oct 2015 10:25

what an opportunity

stand outside your local supermarket, selling plastic bags for less than 5p.  Can't beat a bit of healthy competition to wind up the jobsworths.  

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By qad999
07th Oct 2015 10:44

its a tax

no matter what they call it , it reduces disposable income ...... and its a load of crap , and will not save the planet

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By waltere
07th Oct 2015 11:08

Saving the planet, one bag at a time

qad999 wrote:

its a load of crap , and will not save the planet

Plastic pollution is a genuine problem.  A bit like global climate change.  Marine debris alone is having an impact on wildlife and on the environment, ultimately getting back into the food chain, which should surely concern us all.

Charging for plastic bags does has an effect on consumer behaviour.  Some Scottish stores have reported a reduction in carrier bag use of more than 90%.  I've recently come back from a holiday in Wales (where the charge was already in force) and I admit that this simple measure was enough to nudge me into remembering to fetch my bags for life from the boot where I too often leave them!

This article does highlight some inconsistencies in the way that devolved powers have been used, but let's not throw the baby out with the bath water - reducing the consumption of "disposable" plastic is a good idea; looking after the planet is a good idea because, as they say, there is no planet B.

 

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By cfield
11th Oct 2015 11:02

Planet B

waltere wrote:

because, as they say, there is no planet B.

There probably is a Planet B somewhere - in the vastness of the Universe. Trouble is, we could spend millions of years travelling thousands of light years, only to discover, when we finally get there, that they've got a 5p charge on bags too!

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By Old Greying Accountant
07th Oct 2015 18:58

It is not a tax ...

qad999 wrote:

no matter what they call it , it reduces disposable income ...... and its a load of crap , and will not save the planet

because you don't have to pay it, take bags with you - we have been doing this for years. As well as saving the planet a good quality shopping bag saves your shopping being spread over the car park when the flimsy plastic gives way - probably because it has been over-filled to try and save a few pence by using less bags!

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By Huw Williams
08th Oct 2015 09:55

if it quacks like a duck

Old Greying Accountant wrote:

It is not a tax

because you don't have to pay it

 

But almost all taxes are optional.  I had a client once who got fed up of paying income tax, so stopped working!

 

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By petersaxton
08th Oct 2015 10:32

The rich have better options

Huw Williams wrote:

Old Greying Accountant wrote:

It is not a tax

because you don't have to pay it

But almost all taxes are optional.  I had a client once who got fed up of paying income tax, so stopped working!

The rich have better options. They - and their businesses - can move to other countries with less tax. Obviously it would depend on how exportable their profits were. Even I have toyed with the idea. I don't think it would be easy to get new clients but I never see most of my clients anyway. Personal reasons and relatively low tax rates right now make it not ideal for me though but I'm sure if taxes go up in the future there will be another "brain drain" or "flight of capital".

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By Huw Williams
08th Oct 2015 10:40

Leaving the country

petersaxton wrote:

The rich have better options. They - and their businesses - can move to other countries with less tax.

Seems a drastic way of avoiding paying 5p a bag :)

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By petersaxton
08th Oct 2015 14:06

Avoidance

Huw Williams wrote:

petersaxton wrote:

The rich have better options. They - and their businesses - can move to other countries with less tax.

Seems a drastic way of avoiding paying 5p a bag :)

I was responding to the comment about giving up work to avoid paying taxes!

I think desert islands don't charge for plastic bags though.

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Derek French
By derek44
07th Oct 2015 11:20

Saving Planet

No planet B? I like that.

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By normafogg21
07th Oct 2015 16:30

So Do I

derek44 wrote:

No planet B? I like that.

 

Me too

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By Nebs
07th Oct 2015 11:20

Ocado charge 5p for every bag they use when making your delivery. But they credit you with 5p for every bag (including other supermarkets bags) that you return to them. As you can buy wholesale bags for 1p simply buy 2,000 x 1p bags, give them to your Ocado driver, and get your £100 weekly shop delivered free.

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By lindaluvdup
07th Oct 2015 16:59

Brilliant

Nebs wrote:

Ocado charge 5p for every bag they use when making your delivery. But they credit you with 5p for every bag (including other supermarkets bags) that you return to them. As you can buy wholesale bags for 1p simply buy 2,000 x 1p bags, give them to your Ocado driver, and get your £100 weekly shop delivered free.

Thanks Nebs!

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By cheekychappy
09th Oct 2015 11:27

Maths

Nebs wrote:

Ocado charge 5p for every bag they use when making your delivery. But they credit you with 5p for every bag (including other supermarkets bags) that you return to them. As you can buy wholesale bags for 1p simply buy 2,000 x 1p bags, give them to your Ocado driver, and get your £100 weekly shop delivered free.

 

Are you an accountant or something else?

 

Only £80.00 of your shopping would be free.

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By Nebs
09th Oct 2015 14:11

Whats Maths got do with it :)

cheekychappy wrote:

Nebs wrote:

Ocado charge 5p for every bag they use when making your delivery. But they credit you with 5p for every bag (including other supermarkets bags) that you return to them. As you can buy wholesale bags for 1p simply buy 2,000 x 1p bags, give them to your Ocado driver, and get your £100 weekly shop delivered free.

 

Are you an accountant or something else?

 

Only £80.00 of your shopping would be free.

Yes, I am an accountant or something else.

I asked the three members of staff in the office which of us was correct. Their answers showed an exactly equal division between those who thought you were right and those who thought I was right.

 

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By Huw Williams
09th Oct 2015 17:01

Who's counting

Nebs wrote:

I asked the three members of staff in the office which of us was correct. Their answers showed an exactly equal division between those who thought you were right and those who thought I was right.

 

Based on this we should have a majority government at the next election

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By carnmores
07th Oct 2015 11:23

thanks Waltere good to seem some sense

I read that supermarkets are worried about the loss of metal baskets etc , people are so bloody stupid or mean that I suspect that they may be right!  THIS IS A GOOD PLAN

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By cereus77
07th Oct 2015 11:29

Northern Ireland has the right approach
What a mess they have made of implementing this tax/charge in England. Clearly if it is designed to reduce the number of bags used then the revenue should not be going to "good causes"; it should be ring fenced and used for cleaning up plastic pollution. Attaching a benefit for unrelated charities to buying bags risks people buying them because the money goes to charity! As for the government taking 0.83p VAT per bag; surely if there is ever a case for something being outside the scope of VAT this is it.

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By petersaxton
07th Oct 2015 11:30

Why?

If plastic bags are such a problem why not ban them altogether?

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By keithas
07th Oct 2015 11:34

Saving the planet?

waltere,

I agree with your sentiments but disagree that this is a solution or even a small step in the right direction.
In our house we reused the plastic bags for rubbish disposal. Now we are going to purchase plastic waste bags as that will be a cheaper option. Has anyone come up with an alternative to the plastic bin bag?
Meanwhile the world is continuing to increase its carbon emissions rather than reduce them, animal species are disappearing at an alarming rate, forests are being torn down all over the world whilst our governments meet regularly . . . and do what? Nothing to even begin to reverse the problem.
To rehash a saying, "it's like putting a charge on deckchairs on the Titanic".
 

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By carnmores
07th Oct 2015 11:48

staying in withshire this week

hardly a plastic bag in sight in friends house, everything goes straight into a container , there are 4 - one for recycling , one for garden waste , one for food stuffs and one for i know not what! they are emptied every week for some colours and every other for others. The problem with this is that this simply isnt practical in large cities , any solutions?

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By Anthony123
08th Oct 2015 09:45

easy

where I live we have 2 bins one for everything recyclable and one for rubbish - oh and a small one for food waste that goes to power plant as fuel.

If you live in an urban street with no room for 2 bins you get a supply of bin liners.

I am baffled why other councils do not do this. When I stayed in a cottage in Cornwall we had to put stuff in about 6 different bins, Crazy.

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By Ammie
07th Oct 2015 11:58

IS IT REALLY AN ENVIRONMENTAL ISSUE?

Its all "conditioning" nonsense for financial gain.

It can be very very simple. No more plastic carrier bags, end of!

No, the solution is always financial, pay some money and it makes it alright and carry on as you please. Environmental? Really?

Same as congestion charges, cheap booze and same as the ever lengthening list of penalty attracting offences. Money seems to make it all OK.

5p, that is going to frighten off many!!

Yes, many will be sparked into more frugal use of plastic carrier bags but many won't twitch at the thought. I have no doubt some clever schemes will appear where you can still have bags and pay a little more on the product to balance the supply.

The disjointed administrations within the UK does show once again how ill thought out the matter is.

All very amusing!!

 

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By lme
07th Oct 2015 12:39

Good plan poorly executed

Prospect of devolution driving further complexity is crazy! How can our country possibly be competitive, it's madness!

Thanks for a great article though.

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By petersaxton
07th Oct 2015 12:59

Exactly

lme wrote:

Prospect of devolution driving further complexity is crazy! How can our country possibly be competitive, it's madness!

Thanks for a great article though.

We have Europe wanting to harmonise rules but then different parts of the UK is unharmonising things.

The EU has rules for dealing with immigrants and asylum seekers but countries ignore them an push them into other countries.

How can France let all those people in Calais sit around when they should either claim asylum or be removed from Europe? Is it legal to climb into somebody else's vehicle in France?

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By mkamsmith
07th Oct 2015 15:00

Already tried in Canada

Already went through this over here, but in our case it was municipal (city) government that instituted it.  It died a timely death, although some retailers still charge for the bags.  The city also tried to ban them but the plastics industry threatened a lawsuit.

Here is an article:

http://www.thestar.com/news/gta/2012/11/28/toronto_city_council_kills_pl...

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By Huw Williams
08th Oct 2015 09:59

already tried in Wales

mkamsmith wrote:

Already went through this over here, but in our case it was municipal (city) government that instituted it.  It died a timely death, although some retailers still charge for the bags.  The city also tried to ban them but the plastics industry threatened a lawsuit.

Here is an article:

http://www.thestar.com/news/gta/2012/11/28/toronto_city_council_kills_pl...

but we already have rules in place and working in other parts of the UK.  Maybe Toronto could have another go..

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By BroadheadAccountants
07th Oct 2015 15:32

Nudge

These charges are a nudge in the right direction aligning the social/environmental costs with the actual costs.

Complex rules for such a good basic idea.

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By AndrewV12
07th Oct 2015 15:33

Its madness

 

There are circumstances in which the carrier bag charge does not have to be levied, such as when buying loose fruit, potted plants or medications, but only when the contents of the bag consists entirely of the exempt items. Of-course the list of exempt items is slightly different for each country. For example in Northern Ireland the charge doesn’t apply when buying take-away hot food and drinks.

 

Just charge 5p for an plastic bag, I expect tax was not to complicated once then someone had an idea 

 

'70 microns thick or less', sounds very thin, but it sounds easier to work with rather than 1000 of an inch. 

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By kenatnam
07th Oct 2015 16:40

4 countries, 4 differing rules

and 4 sets of bureaucrats (with lovely pensions) to police them!

Or am I being a cynic?

Thanks (1)
By petersaxton
07th Oct 2015 16:48

The solution is obvious

Go straight to Planet C

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By pauljohnston
07th Oct 2015 19:34

@waltere and @keithas

Is that not because of the legendry tightness of a scotsman's wallet (my Dad is a Scot)

Keith's point is very true and will apply in our house - all bags are used for rubbish or returned to the recycling bin bags container at Tesco.  I will now try and buy on line

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By Caber Feidh
08th Oct 2015 02:00

I must remember to take my micrometer to check that my bags really are "70 microns thick or less".

By the way, for those of us who only have Imperial micrometers in their toolboxes, 70 microns (70 micrometres) is 0.0028 of an inch, not 0.001 of an inch, as AndrewV12 said. [My different spellings are correct]

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By mervyn beach
08th Oct 2015 07:53

Tax avoidance?
Surely then taking your own bag will now be classed as tax avoidance. Won't Margaret Hodge suppprters be standing outside making sure you have no bags on you.

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By petersaxton
08th Oct 2015 09:35

No

mervyn beach wrote:
Surely then taking your own bag will now be classed as tax avoidance. Won't Margaret Hodge suppprters be standing outside making sure you have no bags on you.

Technically it would be "charge avoidance"

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By North East Accountant
08th Oct 2015 09:05

Get rid of the non jobs

If the government got rid of the stupid people who dream this rubbish up they would save a fortune, far more than a few pence on a carrier bag.

 

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By petersaxton
08th Oct 2015 10:24

Storage boxes

We have two Keter Boxes similar or the same to these at the front of our house. The bin men have just took away the rubbish now.

http://www.gardenbuildingsdirect.co.uk/plastic-storage/keter-garden-stor...

 

 

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By listerramjet
08th Oct 2015 11:51

solutions!

If the problem is plastic pollution then surely the solution is dealing with used plastic bags - not killing them off.  They are after all one of the most exceptionally useful things ever produced.  I am tempted to write a tome on 1001 uses of a plastic bag!

If you believe the carbon nonsense then you should be against this - plastic bags are lower carbon footprint than what they replace.  But of course, most of the "solutions" to the supposed carbon problem are worse than the postulated problem.  Just look at the Diesel shenanigans.

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By carnmores
10th Oct 2015 12:03

Nonsense Nebs

of course none of it would be free , THEY are not fools you know

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By BroadheadAccountants
09th Oct 2015 13:16

Best value......

you can get a trolley for £1.

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By carnmores
10th Oct 2015 12:05

apologies Nebs

 didnt get the irony first time round , anyway glad you have a floating voter were they in a bag?

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By justsotax
12th Oct 2015 13:30

I made the mistake of going to mcdonalds (in wales)

just after they had changed the rules....didn't realise....not even when they asked if I wanted a 5p bag (that was their words) - of course I preferred (or assumed) they would give me a free one...didn't I look the numpty walking out with a handful of food!...that said why are paperbags charged for, aren't they more enviro friendly!?

 

 

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By cfield
12th Oct 2015 14:20

Foxes

justsotax wrote:

...that said why are paperbags charged for, aren't they more enviro friendly!?

The local foxes probably think so!

Back in the good old 1980s, when things were so uncomplicated (I'm an ELO fan) there was a supermarket called Presto which used to charge for carrier bags. I think they got re-branded as Safeway. Anyway, I used to bring Tesco and Sainsburys bags when I shopped there to avoid their charge (which earned me a glare from the store manager on one occasion, but that just made it more fun).

They weren't doing it to save the planet though. They were just profiteering. They used to charge shoppers for their underground car park too, but I used to re-cycle the sticky receipts and put the same one on my windscreen every week. My then-girlfriend thought that was hilarious. She couldn't get over the fact an accountant would do that. She used to think we were so straight.

Personally I think they should just ban single-use plastic bags altogether if they're so harmful to the environment. Or better still, give people an incentive to re-cycle them, such as £10 per kg. I always kept them in a heap behind our coat stand and brought them back to Waitrose every 2-3 months, but there was never anywhere to hand them in, so invariably they'd end up dumped in a trolley.

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By carnmores
12th Oct 2015 14:18

@Peter

all the old plastic bags and bottles wash up on desert islands so give that a miss

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By Syd_Partridge
25th Oct 2015 10:37

Unfair competition

'In Scotland, Wales and England retailers can keep the carrier bag charge if they wish, having paid over the VAT portion of the charge (0.83p) to HMRC.'

While small employers are exempt.

This means that government legislation is allowing large employers to benefit from the charge - surely this is encouraging unfair competition

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By Wiganer Elaine
26th Oct 2015 12:24

Not Quite

Syd_Partridge wrote:

'In Scotland, Wales and England retailers can keep the carrier bag charge if they wish, having paid over the VAT portion of the charge (0.83p) to HMRC.'

While small employers are exempt.

This means that government legislation is allowing large employers to benefit from the charge - surely this is encouraging unfair competition

 

Small employers are not legally required to charge for the bags, but it doesn't mean they can't and in fact many are already doing so!

Also, am pretty sure that any carrier bag proceeds not handed to charity will be classed as taxable income!

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