Single Use Carrier Bag Charge – VAT implications

Vat implications of Northern Ireland’s Single Use Carrier Bags Levy


On Monday 8th April 2013 the Single Use Carrier Bag Levy came into force.


The VAT treatment of the Single Use Carrier Bag Levy in Northern Ireland differs from how it is currently treated in Wales.


Practical Implications for a VAT Registered retailer operating in Northern Ireland:

If a retailer charges the minimum allowable charge of 5 pence per single use carrier bag, then the sale is classified as being … “Outside of the scope of VAT”, and as such:

  • The retailer doesn’t charge the customer any VAT on the 5 pence charge for each bag.
  • The retailer does not include the 5 pence proceeds generated from each carrier bag in the Net Sales entry on their VAT return (Vat Return Box 6)
  • The retailer does not include any VAT liability on the 5 pence proceeds generated from carrier bags within VAT due in this Period (Vat Return box 1).
  • The retailer may reclaim any input vat incurred on the initial purchase of these carrier bags.


In our next article we’ll take a quick look at the VAT implications of charging more than the minimum 5 pence per bag.

Single Use Carrier Bag Charge


Northern Ireland’s Single Use Carrier Bags Levy



As from Monday 8th April 2013 the Single Use Carrier Bag Levy came into force.


This piece of legislation is aimed at reducing the amount of plastic bags that are dumped into landfill each year in Northern Ireland.


From this date “all sellers of goods in Northern Ireland must charge their customers at least 5 pence for each single use carrier bag supplied new”.  The retailer must collect this money from the customer, and then forward this money on to The Department of Environment on a quarterly basis.


The retailer will also be required to complete and submit a quarterly return online detailing:

  • No of new single use carrier bags issued from each location
  • Proceeds received from single use carrier bags supplied to customers
  • The amount of VAT chargeable
  • The net proceeds of the charge
  • The retailer has an obligation to keep records in support of the above noted points for 6 years.


In our next article we’ll take a quick look at some of the VAT implications on the carrier bag levy.

Possibly a little more “something for nothing” -Enhanced Capital Allowances on Energy Saving Equipment

Previously I pointed out the potential savings that can be made and the finance available from The Carbon Trust for replacing current lighting, heating, cooling equipment etc with an energy efficient equivalent. In that article I mentioned that the cash flow savings delivered through reduced payments to your utility supplier can finance the loan repayments. This is not the whole picture. There is still a little more meat to add to the bones on this topic.

HRMC have in recent years attempted to encourage business to invest in green technology/ equipment. This has primarily been delivered through the Capital Allowance scheme.

The ‘incentive’ as provided by HMRC is the availability of Enhanced Capital Allowances to achieve tax relief on the acquisition and installation of certain certified energy saving equipment.

Check the following link to confirm that any potential equipment acquisition qualifies for Enhanced Capital Allowances before you buy

The application of these Enhanced Capital Allowances effectively allow the business to claim tax relief on the full cost of acquisition and installation of this equipment in year one.

Example – assume the business spends £10,000 on energy efficient equipment and its subsequent installation. The business can then claim a reduction in its taxable profits to the extent of £10,000. This is applicable to either limited company, sole trader, or partnership businesses.

There is a further aspect to the Enhanced Capital Allowances for limited companies that we will look at next time.

The Modern Accountant ????

But Accountants DO NOT blog……


This may well be true, yet here we are, accountants, and we are trying our hand at blogging!!


It has become a general consensus that accountants are not known for trying out new ideas, and as for social media and blogging well, they simply ‘do not have the time’, it is ‘not necessary’, it ‘will not increase our profits’, it ‘will not add to the quality of service for our clients’ and it is ‘not an efficient use of our time.’


While this is all true, and ok, it probably won’t help us understand our clients better, it is most likely not very proactive, and lets be honest, who NEEDS an accountant that blogs?? However, despite all this, and in a bold NEW approach, I have pondered over the last few months that maybe our clients would like to understand US a bit better!!!!


I personally have always felt, even way back in my training years, (which feels like a million years ago now but really is not!!!) that it is important to show our clients that there is an ordinary human being behind all the ‘serious’ chat, tax regulations and number crunching. Maybe even someone that dare I say it has a ‘personality of sorts’!!!


So based on all this and with a gentle push and encouragement from some of our twitter friends Helen Cousins (@xcelbusiness), Sian Phillips (@_sians) and Sage Ireland (@sageireland) we are going to attempt this blogging thing!!!


This is my first ‘introductory’ blog and I hope you will all bear with me as I try to ‘master’ this over the coming weeks.


For now i have listed below some of our earlier posts that we included previously. A couple of them were in response to a few past client queries, which actually did end up being ‘a proactive use of our time!’


In the mean time if you have any interest in a specific topic you would like to see more information on please feel free to get in touch with us!!


and we have social networks too……


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