From 5 October 2015 a minimum 5p charge will be introduced in England for single-use carrier bags. This will bring England in line with the rest of the UK, with the charge already in place across Wales, Scotland and Northern Ireland; albeit there are slight variations between the differing Regulations.
Across Wales, Northern Ireland and Scotland, there has been reduced plastic bag distribution since the introduction of the charges. It is hoped that the scheme will have a similar impact in England.
The charge will apply, where goods are sold in England or delivered within England in unused single-use plastic carrier bags with handles that are 70 microns thick or less. The requirement to charge will only apply to those organisations with 250 or more full-time equivalent employees. For retailers who are part of a franchise or symbol group the 250 employee limit applies to each individual store, and not the larger business as a whole.
There are a number of exemptions from the charge, for instance where the plastic bag is for prescription-only medicine or for uncooked meat.
Retailers must submit records to the Department for Environment, Food and Rural Affairs regarding the scheme. The Single Use Carrier Bags Charges (England) Order 2015 states that the records must include:
- the number of single-use carrier bags supplied;
- the gross proceeds from the charge;
- the amount of any VAT received;
- the amount of any reasonable costs and the apportionment between any different types of reasonable cost; and
- the net proceeds of the charge and how they have been used.
- Reasonable costs can be deducted from the proceeds of the charge. These might include the costs of training staff about the new requirements. However, the expectation is that the remaining proceeds will be donated to good causes. In Northern Ireland the net proceeds (from the 5p levy) are paid to the Department of the Environment. Within England retailers will have discretion regarding which causes the net proceeds are donated to.
The initial reporting period will run from 5 October 2015 – 6 April 2016. Subsequently, the reporting period will run annually from 7 April – 6 April. The information from the records supplied will be made publicly available.
Failure to comply with the requirements to charge; keep records; supply records or where a retailer misleads regarding their compliance with the law can lead to either a fixed or variable penalty. Fixed penalties are either £100 or £200 depending on the offence with a 50% reduction in fine for early payment and a 50% increase for late payment.
Variable penalties range too, with a penalty of up to £5000 for failure to charge; keep records or supply records. Where a retailer misleads regarding their compliance then the maximum penalty increases to £20,000. Similarly, a 50% reduction for early payment within 28 days and 50% increase in penalty level if payment is not made within 56 days will apply to variable penalties.
Local authorities will enforce the Regulations and can require retailers to publicise their breaches. Therefore, it is important that those who will need to levy the charge are aware of when the Regulations come into force and have provisions in place to ensure compliance.
In terms of enforcement, there is likely to be a short period of grace but as these provisions already exist in the other nations there will be an expectation that English retailers will readily comply. By analogy, after the charges were introduced in Wales in October 2011 only 6 retailers were found to be in breach of the Regulations during the period to August 2012.
Practical Tips for Retailers
- Assess whether the Regulations will apply to your business. The starting point is identifying whether you have 250 or more full-time equivalent employees as at 5 October 2015. Part-time and seasonal staff will be included as a proportion of a full time employee. This assessment needs to be undertaken at the start of each reporting year.
- Identify any relevant exemptions. Understand what bags the charge applies to and whether these are provided by your business. Also identify any relevant exemptions when bags need not be charged for.
- Provide training to staff to ensure they are familiar with the scheme and its application. All staff need to have a basic awareness of the introduction of the scheme to be able to answer customer questions but more detailed training may be required if they are expected to apply any of the exemptions manually.
- Consider how the changes will be communicated to your customers. Effective communication of the changes will assist staff when trying to apply the charges and lead to less objections.
- Ensure provisions are in place for accurate record keeping. Prior to the charge being implemented it is important to ensure that there is a process for all the relevant information required for DEFRA to be captured.