The UK Treasury has confirmed to the Scottish Government that VAT won’t be charged on bottles returned under Scotland’s Deposit Return Scheme (DRS).
In a letter from UK Government Financial Secretary to the Treasury Victoria Atkins to Scottish Environment Minister Lorna Slater, it was confirmed that VAT will not be applied on the deposit amount when it returned for recycling. But VAT will be due on deposits that have not been redeemed with responsibility falling on the producer who originally issued it.
These changes will be formally announced in the Spring Budget on 15 March.
Although not confirmed, it would appear likely that this approach will be taken across DRS when introduced across the rest of the UK.
Lorna Slater also confirmed this week that Scotland’s DRS will be launched on 16 August this year.
