Scottish carrier bag charge introduced
A charge for single use carrier bags has been introduced in Scotland. With effect from 20 October 2014 a minimum charge of 5p has been introduced on single use carrier bags supplied in Scotland. From this date, single use carrier bags will no longer be given away free when people buy goods. This mirrors the levy in place in Wales and Northern Ireland.
The charge is expected to dramatically reduce the number of carrier bags used in Scotland and will affect the vast majority of retailers. There are some exemptions on the requirement to charge based on bag size, items being carried, certain restricted locations and for specialist bags.
The 5p charge is taxable at the standard rate of VAT and therefore a VAT-registered business would charge 4.17p 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 although there may be reliefs available where the normal charitable donations/gift aid rules are met. The Scottish Government expects the proceeds to fund good causes in Scotland.