England needs a shopping bag tax with a difference

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Good news for the environment, the Scottish government is the latest to ban free carrier bags, forcing people to pay a quasi-plastic bag tax.

It's especially good news considering it was announced in 'Good Money Week' because this is a 'good' way – in all senses – to make money. Scotland has changed the rules so shoppers have to pay 5p per disposable plastic bag, following in the footsteps of Northern Ireland and Wales.

The problem is who does the money made from the 5p charge go to? You may not think this is a pertinent question when the reason for getting rid of free carrier bags is environmental but for the government the charge represents a nice big tax windfall as the 5p cost is subject to VAT.

Accountants Baker Tilly have calculated that the 800 million carrier bags used last year in Scotland would equate to £6.6 million in VAT if people don't change their habits and continue to use plastic bags willy-nilly.

On top of that there is also a possibility that the charge would boost profits of a company, which would then have to pay corporation tax on them.

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5p Charge For Plastic Carrier Bags

Next step

I absolutely think England should adopt the ban on free carrier bags. Hopes are this will happen next year but we're still behind out UK cousins and far behind the Republic of Ireland, which introduced the PlasTax in 2002 and has since then seen plastic bag consumption reduce from 1.2 billion bags a year to 230 million.

England is embarrassingly far behind the curve when it comes to disposable bags and so in order to make up for our lack of environmental concern I think when a ban is introduced we should go further: all the proceeds of the charge go to good causes.

Just 160 businesses in Scotland have so far said they will donate the money raised through the plastic bag tax to charity. These businesses should be commended but we can't ignore the question: why so few?

Banning free carrier bags isn't just a way for politicians and companies to prove their green credentials, it's also a chance for them to give something back to their communities and support good causes.

Legislating that all carrier bag charge proceeds go to good causes is a win-win and ethical on every level; not just environmentally but socially.

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