From 5 October, all organisations with 250 employees or more who sell or deliver goods in England will be required to charge a minimum of 5 pence per "qualifying plastic bag" used for carrying certain types of goods. If a store is part of a franchise or symbol group, only the employees in the particular business in question, rather than the franchise or symbol group, are included.

The Department for Environment, Food and Rural Affairs (Defra) has issued extensive guidance to accompany the Single Use Carrier Bag Charges (England) Order 2015. Legislation is already in place across Wales, Northern Ireland and Scotland.

The bag essentials

The "charge" applies to any unused, single use, carrier bag made of "lightweight plastic material" with handles. Lightweight plastic material includes various polymers of a maximum thickness of 0.07mm. There are some items which can be provided to a customer in a bag without the charge applying. Exclusions include unwrapped food for human or animal consumption, goods contaminated by soil, uncooked meat, fish or poultry, and unwrapped blades. If a bag containing predominantly excluded items (e.g. steaks) also contains a non-excluded item (e.g. a Toblerone bar), then the charge applies.

The expression "single use" is misleading: notwithstanding that many plastic bags are in practice reused by the customer or returned to (and recycled by) the retailer, these will be treated as single use. There is a specific exclusion in the Order for a returnable, multiple reuse bag, "sold for more than 5 pence and made of material of a thickness between 0.05 and 0.07mm, with a width and height both greater than 404mm or a width or height greater in either case than 439mm".

Where the number of bags is not known until delivery, the retailer can charge for an average number of bags for multi-bag deliveries, as long as 5 pence or more is charged per bag overall. There has been some comment about the generous use of plastic bags for online deliveries. Some retailers have indicated that incentives will be offered to customers who return bags. The government is also currently looking into the possibility of removing the charge on biodegradable plastic bags and a report is expected on this in October.

Tax treatment?

In England, sellers will be required to keep records in relation to the number of bags they supply, the proceeds of the charge and the costs involved in complying with the Order. The record must also state the sum of the net proceeds of the charge and what the retailer has done with the proceeds of the charging scheme. It appears the government's intention that the supply of a plastic bag is standard rated for VAT purposes. Unlike the Northern Irish levy, where proceeds must be passed to the Department of the Environment (i.e. it is, effectively, a tax), there is no obligation on the seller to pay the proceeds to the government (i.e. it is not, effectively, a tax). Defra guidance states that it is "expected" that proceeds will be donated to good causes, and records provided to Defra will be published on the GOV.UK website, including where the proceeds were paid. Local authorities are responsible for enforcing the scheme. Trading Standards can issue fines if sellers are not charging 5 pence as required under the Order, or have failed to comply with record-keeping obligations.

Unintended effects

It appears that the plastic bag charge has proven to be a successful driver for behavioural change in Wales, Scotland and Northern Ireland. A recent report by the Welsh Assembly Government estimates that use has declined by 71 per cent, whereas the use of bags for life and multi-use bags has risen 57 per cent. However, concerns have been expressed about potential health risks related to the over-reuse of grocery bags. Using bags for meat and subsequently reusing them for fruit and vegetables could cause the spread of foodborne illnesses. The Food Standards Agency recommends that any reusable bags are washed between uses to avoid the spread of bacteria. A 2012 study into the health effects of the plastic bag ban in San Francisco showed that, relative to neighbouring counties without the ban, the number of hospital visits from foodborne illnesses increased by at least 25 per cent after customers began reusing grocery bags.

Bags of potential?

The English scheme follows those already set up in Wales, Northern Ireland and Scotland, but the types of bags covered and the exclusions vary. This is unfortunate, because these differences could cause an unnecessary administrative burden for national retailers operating in more than one country in the UK. For example, we understand that the Welsh Assembly Government has accepted Ocado's position that, as its bags are primarily used to protect goods in its warehouses, Ocado's bags would not fall under the Welsh scheme. A similar approach does not appear to have been adopted in England. The scheme is the latest example of the different approaches adopted between countries forming part of the UK on waste policy, with the devolved administrations seeking to be more the ambitious, early adopters.

Exclusions

Unwrapped food bag – a bag intended to be used solely to contain wholly or partly unwrapped food for human or animal consumption 

Unwrapped loose seeds bag – a bag intended to be used solely to contain wholly or partly unwrapped loose seeds, bulbs, corns, rhizomes, flowers or goods contaminated by soil 

Unwrapped blades bag – a bag intended to be used solely to contain wholly or partly unwrapped axes, knives, knife blades or razor blades 

Prescription-only medicine bag – a bag used for prescription-only medicine, pharmacy medicine or listed appliance sold in accordance with a prescription 

Returnable multiple reuse bag – a bag which is sold for not less than 5 pence and which is intended to be returnable to the seller to be replaced free of charge; is 'made from a material of thickness between 0.05mm and 0.07mm and has a width and height greater (in each case) than 404 mm or width or height greater than 439 mm 

Woven plastic bag – a bag the material of which is made by interlacing long threads passing in one direction with others at a right angle to them 
Transit goods bag – a bag which is intended to be used to carry goods in a transit place