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<p>The Government supports the environmental aims of deposit return schemes and will
continue working to ensure they operate effectively within the VAT rules.</p><p> </p><p>VAT
is charged on the supply of most bottled drinks. 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.</p><p> </p><p>HM
Treasury continues to engage with the industry, including soft drinks producers, to
explore the issues around the design and implementation of deposit return schemes.</p>
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