5p plastic bag tax makes cashiers tax experts

Till operators will have to know the tax laws around plastic bag rules

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You would think the introduction of a 5p plastic back tax is pretty straightforward: you need a bag, you pay 5%.

Well, not exactly.

Till operators will, from 5 October, have a new role as tax experts, as they will be the ones who have to decide whether you pay for your plastic or not.

From this date, England will join Scotland, Wales and Northern Ireland and charge 5p for a carrier bag generating 0.83p in VAT for HM Revenue & Customs.

But, the till operator will have to make sure that the bag 'qualifies' as a bag, before they charge you. According to accountants Baker Tilly - who have been studying the new rules - a bag is 'unused, plastic, with handles, 70 microns thick or less' (no, I don't know what microns are either).

Pretty straightforward, you'd think, but there are a lot of exemptions for things like fish and meat products, unwrapped food for human consumption – such as chips, unwrapped blades and axes, and even for 'live aquatic creatures in water'.

Oh, and if your cobbler gives you your shoes back in a plastic bag, that bag is free too.

To make it even more confusing the guidance from the taxman is this: 'A bag can contain multiple items from [the exemption] list and not incur a charge. However, if the bag contains other items then, the 5p charge is applicable.

'For example, there wouldn't be a charge for a bag containing an unwrapped blade and unwrapped loose seeds, but adding a box of cornflakes means you'd have to pay an additional 5p.'

Baker Tilly's solution is 'buy a bag for life' which will make life much easier for people working at your local supermarket.

And this is potentially what people will do if experience in other parts of the country are anything to go by.

Last year, people living in England used 8.3 billion plastic carrier bags, which under the new rules would net HMRC around £70 million in VAT. However, since the 5p charge was introduced in Scotland last October, the number of single use carrier bags has fallen by 149 million, or 80%.

On this calculation, HMRC would only net around £14 million in VAT, which isn't a bad return when you consider its getting people at the checkouts to do its job for it.

Read more:

5p plastic bag charge in Budget

Welsh plastic bag use plummets on 5p tax

England needs a carrier bag tax with a difference

5p Charge For Plastic Carrier Bags