The compulsory charge on 'single-use' carrier bags, which retailers will be required to charge to customers in Wales with effect from 1 October, will be consideration for the bag and subject to VAT at the standard rate, HMRC announced. People who sell goods in Wales, or sell goods that are delivered in Wales, will need to charge at least five pence for each chargeable bag.
‘In order that customers pay the same amount regardless of the VAT status of the business, the stated minimum charge (initially 5 pence) is the minimum total to be charged by non-VAT-registered businesses. The stated minimum charge will be deemed to include VAT when charged by a VAT-registered business,’ HMRC said in Revenue & Customs Brief 23/11.
For income tax and corporation tax, receipts from the compulsory charge should be brought into account in calculating trading profits. ‘The Welsh Assembly Government expects the proceeds to be used to fund good causes in Wales and relief may be available where the normal charitable donations/gift aid rules are met,’ HMRC added.
The Single Use Carrier Bags Charge (Wales) Regulations, SI 2010/2880, will come into force on 1 October 2011, and there are 40 pages of draft guidance on the Welsh Assembly Government website.
The draft guidance says: ‘If you are a business that trades above the VAT threshold and supply more than 1,000 bags in a year, you will need to publish these records either in your shop or by means of your internet home page.’
The compulsory charge on 'single-use' carrier bags, which retailers will be required to charge to customers in Wales with effect from 1 October, will be consideration for the bag and subject to VAT at the standard rate, HMRC announced. People who sell goods in Wales, or sell goods that are delivered in Wales, will need to charge at least five pence for each chargeable bag.
‘In order that customers pay the same amount regardless of the VAT status of the business, the stated minimum charge (initially 5 pence) is the minimum total to be charged by non-VAT-registered businesses. The stated minimum charge will be deemed to include VAT when charged by a VAT-registered business,’ HMRC said in Revenue & Customs Brief 23/11.
For income tax and corporation tax, receipts from the compulsory charge should be brought into account in calculating trading profits. ‘The Welsh Assembly Government expects the proceeds to be used to fund good causes in Wales and relief may be available where the normal charitable donations/gift aid rules are met,’ HMRC added.
The Single Use Carrier Bags Charge (Wales) Regulations, SI 2010/2880, will come into force on 1 October 2011, and there are 40 pages of draft guidance on the Welsh Assembly Government website.
The draft guidance says: ‘If you are a business that trades above the VAT threshold and supply more than 1,000 bags in a year, you will need to publish these records either in your shop or by means of your internet home page.’
