A business that employs 250 or more full-time equivalent employees, in all roles not just in retail roles, will be treated as being large and must charge the 5p. The number of employees is calculated at the start of each reporting year. The first reporting year will start on 5 October and run to 6 April 2016. Subsequent reporting years will start on 7 April.
When calculating full-time equivalent employees a business that is operated under a franchise needs to only include employees in that business, not the whole franchise.
The type of bags that will carry the charge will be:
- unused
- plastic
- with handles and
- 70 microns thick or less.
Paper bags will not carry a charge and we could therefore see some retailers looking to follow a trend set by US retailers in offering paper bags.
Where deliveries or online sales are made to customers any plastic bags used will also have to be included in the total cost. It may be that the amount of bags to be used is unknown when the order is placed. In this situation an average number of bags can be used in the charge as long as 5p or more is charged per bag overall.
There are a number of specific exemptions on the types of bags which would not be subject to the charge. These include bags for:
- uncooked fish and fish products
- uncooked meat, poultry and their products
- prescription medicine
- free promotional material given away.
Retailers will need to maintain reporting records and also make a report to Defra on or before 31 May following the end of the reporting year. The first report should therefore be sent to Defra by 31 May 2016.
The details to be sent to Defra are as follows:
- number of bags distributed
- the amount of money received from selling the bags
- any VAT paid from the money received from selling bags
- what the business did with the proceeds from the charge
- any reasonable costs (see below) and how they break down.
Reasonable costs include costs to comply with the legislation and do not include the costs of the bags. Examples would be:
- costs of changing till systems
- training staff
- communicating the policy to staff.
Once reasonable costs have been deducted, the remaining proceeds should all be donated to good causes.
The local authority, where the shop is based, is authorised to make inspections to ensure the law is being followed. Where there is non-compliance, they will have the authority to issue a notice to the retailer to correct the non-compliance or issue a fixed fine of up to £200 or a variable penalty of up to £20,000. In additional the local authority can order the retailer to advertise that they have broken the law.
Smaller retailers set to charge
Data from the Department for Environment, Food and Rural Affairs also suggests that around 8,000 small retailers and cornershops are expected to charge 5p per plastic bag, despite not benig forced to do so. However, this is yet to be verified and we await further information.
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