The introduction of a 5p bag tax in England will directly affect retailers with more than 250 employees who will need to collect and donate proceeds to charity for single use plastic bags. Although SME retailers are currently exempted from the plastic carrier charge, the tax presents a valuable promotional tool as consumers shopping habits change radically as the need to keep and reuse bags becomes more important. By branding your own good quality bags this will not only create a cost efficient advertising platform but also ensures you stay ahead of your competitors.
The introduction of the single use carrier bag charge in England will not only have a lasting effect on consumer habits but also on the retailers they buy from. Retailers need to know about the plastic carrier bag charge as the new tax is likely to impact the entire industry. Below we have detailed the most common questions with regards the UK plastic bag tax but if you are feeling brave and have a few hours free you can read the full proposed regulations here.
What is the plastic bag levy charge and why is it being introduced?
The English government is to introduce a 5p charge on single-use plastic bags from 5th October 2015 as part of an overall policy to reduce waste. A bag charge is already in place for all retailers in Wales, Scotland, Northern Ireland and the Republic of Ireland.
Will it affect all retailers?
Retailers must charge only if they employ 250 or more full time employees and sell or deliver goods in England. However the Irish experience tells us that consumers will quickly begin to expect paper bags from all retailers big and small and will associate plastic bags with pollution and cheapness.
If the charge doesn’t affect me can I still use plastic carrier bags?
Yes, but MP’s and the Association of Convenience Stores have heavily criticised the exemption of small retailers and pointed to other places such as Northern Ireland, Wales and Scotland where the charge applies to all retailers. At present the charge will not affect SME retailers but the introduction of the charge has a much wider impact on the supply and demand of plastic bags. As the bigger retailers reduce their use of plastic bags the demand will significantly decrease making it harder to source and buy plastic bags.
Bags you do NOT have to charge for:
Uncooked meat, fish or poultry
Prescription Medicines
Used for a service
Used to give away free promotional material
All bags used to package bulbs or seeds
Considered as sealed packaging for mail order
How should you collect the charge and where will it go?
How you collect money from the distribution of plastic bags is up to each retailer. The English government expects retailers to donate the proceeds to charity although it is unclear how this will be enforced. In Wales and Scotland retailers commit to a voluntary agreement to donate the proceeds to charity. Reasonable costs can be deducted from the proceeds such as training staff and updating cash registers etc. but this does not cover existing costs such as the cost of bags.
Do I need to keep a record of the money collected?
Yes, you must keep a full year’s record for three years starting on the 31st May of each year. The records must be sent to Defra on or before the 31st May. It is the local authority where your shop is based that will ensure the law is being practised. Proposed legislation details that retailers will be fined if these records are not presented. However, if you switch to paper you can avoid this bureaucracy.
What carrier bags are included in the charge?
You must charge a minimum of 5p for every bag that is unused, plastic and with handles. Bags made from paper do not fall under the carrier bag tax. The exemption for biodegradable bags is at present still under review.