The Queen's Speech last week confirmed that from October 2015 there will be a 5p tax on single use carrier bags, bringing England in line with the rest of the UK.
England currently lags behind the rest of the UK when it comes to charging for carrier bags. Since 1 October 2011, Welsh retailers, regardless of size, have been obliged to charge consumers a minimum of 5p for each single use carrier bag. Northern Ireland followed suit by introducing a 5p charge on 8 April 2013 and last week Scottish ministers voted to introduce a similar charge from 20 October 2014 in Scotland for retailers with ten or more full time employees.
What will happen in England?
How much? A charge of 5p per carrier bag.
Who has to pay? Clearly large retailers will be caught. Small and medium-sized businesses are stated to be exempt from the charge to avoid imposing burdens on start-up and growing businesses. Detail surrounding precisely what will be deemed a small, medium or large business is yet to emerge..
What counts as a 'carrier bag'? The detail will likely be included in draft legislation but the Queen's speech briefing note states that the charge will only apply to "single-use plastic bags" and not to paper bags (unlike in Wales and Northern Ireland where the charge applies to both).
Where does the money go? Retailers will be expected to donate all proceeds of the charge to good causes, as in the case in Wales, and the government is looking into developing a voluntary agreement with retailers to support this. Retailers will also be required to publish data to show customers what the proceeds are being used for. Retailers with a Welsh presence will therefore already be familiar with this.
What about online and distance selling? Again, details have not yet emerged, but the model in Wales and Northern Ireland may be followed where the charge applies to all places where goods are sold, including online retailers selling into Wales and Northern Ireland.
What about VAT? While the detail is unknown, the model in Wales and Northern Ireland may be followed where if a retailer is VAT registered, there will be VAT implications arising from the charge.
Sanctions for non-compliance? Adverse publicity will be key to retailers and we imagine that draft legislation will include some financial penalties for non-compliance.
What will happen next?
It is likely a consultation will be issued by the government in in the coming months for input from retailers and environmental groups. We shall monitor progress and keep you updated.