Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what discussions he has had with soft drinks producers on the impact of VAT rules on the roll out of the Deposit Return Scheme.

The Government supports the environmental aims of deposit return schemes and will continue working to ensure they operate effectively within the VAT rules.

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.

Her Majesty’s Treasury continues to engage with the industry, including soft drinks producers, to explore the issues around the design and implementation of deposit return schemes.