Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether his Department has made an assessment of whether VAT is charged on deposits made as part of deposit return schemes in other countries.
VAT is charged on the supply of most bottled drinks and in such cases, where the price of a drink includes a deposit on the bottle, VAT is due on the whole price.
This is in line with the VAT principle that applies to deposits generally. It is also consistent with the rules in some other countries with a deposit return scheme.
The Government supports the environmental aims of the deposit return schemes and will continue working to ensure they operate effectively within the VAT rules, including exploring the issues with those involved in designing and implementing such schemes.