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HM Revenue and Customs Brief 38/14 - compulsory charge on single use carrier bags in Scotland


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Published 16 October 2014


  • from 20 October 2014 the Scottish Parliament will introduce a compulsory charge on single use carrier bags provided with goods supplied in or from Scotland
  • this is not a HM Revenue and Customs measure. However, there are implications for VAT, Corporation Tax and Income Tax
  • this brief explains the basics of the charge and the tax implications

Who needs to read this?

Suppliers of goods in Scotland who sell or deliver goods using single use carrier bags.


The Scottish Parliament is to introduce a compulsory charge on single use carrier bags set at a minimum of 5 pence. This charge will apply on single use carrier bags supplied with goods, supplied in or delivered from Scotland. The legislation takes effect from 20 October 2014.

VAT implications

  • where suppliers are liable to charge VAT, the amount they charge for a bag is tax inclusive at the standard rate of VAT. For a VAT registered business charging 5 pence, the taxable amount will be 4.17 pence and the VAT 83 pence
  • suppliers using a Retail Scheme should ensure that VAT is properly accounted through their scheme
  • non-VAT registered suppliers must still charge the same minimum amount of 5 pence

Direct tax implications

  • for Corporation Tax and Income Tax, receipts from the compulsory charge on single use carrier bags should be brought into account in calculating trading profits
  • the Scottish Government expects the proceeds to fund good causes in Scotland. Relief may be available where the normal charitable donations/gift aid rules are met

Further information

Information about how the charge will operate is available from the Scottish Parliament website.

About the Author

Crown Copyright 2014.

A licence is needed to reproduce this article and has been republished for educational / informational purposes only. Article reproduced by permission of HM Revenue & Customs.

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Article Published/Sorted/Amended on Scopulus 2014-10-21 09:00:00 in Tax Articles

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