Question to the HM Treasury:
To ask the Chancellor of the Exchequer, how much revenue his Department estimates will be raised as a result of charging VAT on deposits in each of the first three years of operation of the proposed Deposit Return Scheme for (a) England, Wales and Northern Ireland and (b) Scotland.
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.