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.

Please follow and like us: