carrier bag tax
October 6, 2017

The Carrier Bag Tax: where is your money going?

We’ve all been paying the carrier bag charge for a couple of years now, but do you actually know where your money is going?

Let’s face it – it’s irritating when you forget to take your carefully folded bag-for-life to the supermarket, and even more irritating when you think that the supermarket is making a profit from your forgetfulness. You may not know it, but many of the 5p’s we’re handing over actually goes to UK charities.

While it’s not mandatory, the government does expect stores who sell the 5p carrier bag to do some good with this profit. Many of the big retailers have already given away a fortune to charities. In fact, government figures for the first six months of the carrier bag charge show that, after VAT and other charges, over £41 million was raised.

There’s a bit or work involved for those retailers who operate the carrier bag charge. They have to report on how many bags they have sold, the money generated, how much went to charity and which charities they supported.

The Department of Environmental, Food and Rural Affairs predicts the carrier bag charge will raise an estimated £730 million for good causes in the first 10 years.

You’ve paid the carrier bag charge – where is your money going?

In the first year supermarket giants Asda, Iceland, Morrisons and Waitrose pooled their money to fund a new Alzheimer’s centre at University College London. Now they tend to donate to local and environmental causes.

Let’s look at some of the major retailers and what they do with the carrier bag charge money…

Tesco have a charity scheme called The Bags of Help Scheme which invites local groups to apply for money. Shoppers are then asked to choose their preferred cause from three in the month. Depending on popularity, money from £1000 to £4000 is allocated to the three. To date more than 3500 community groups have benefited from the scheme with over £27 million being donated. Half a penny goes into reminding shoppers not to forget their bags for life and a fraction of a penny goes to Groundwork which runs the Bags of Help Scheme.

Morrisons set up the Morrisons Foundation which awards grants for charity projects. Any local charity can apply for a grant. The foundation also matched any funds raised for charity by Morrisons employees.

Asda targets local charities and community schemes saying “All proceeds, less VAT, from the charges will be donated to charities and good causes across the UK.”

Sainsbury’s run a different kind of scheme offering automatic replacement on their 5p and 10p bags for life when they are damaged, which isn’t part of the government scheme. They do still give money to local good causes from the sale of bags but this is less than other big retailers because they make less profit.

Waitrose donate every penny from carrier bag sales across their stores in England to a community and environmental fund with no deduction for costs. They have announced that £1 million will be spent on cleaning up litter – £500,000 through the Marine Conservation Society and the other £500,000 through organisations dedicated to cleaning up open spaces.

B&Q pass on the full 5p from single use carrier bags and 5p from every reusable carrier bag sold to Children in Need.

Aldi donates the money made from its carrier bags to an educational partnership with RSPB, donating £775,000 in the first year, with a target of 2 million by 2018.

Marks & Spencer deduct the VAT from the carrier bag charge income from England, Scotland and Wales then spilt the remainder, with half going to local community causes and charities chosen by the individual stores. The other half goes to national charities including MacMillan Cancer Support and Breast Cancer Now.

It is encouraging to see the good our carrier bag charge is doing, but let’s not forget the good we do when we do remember to use our bags for life. In 2014 when the charge was introduced 7.6 billion carrier bags were being given away. In the first six months of the carrier bag charge just 1.1 billion were sold!

Encourage your customers to buy your bags for life by offering them a quality bag and a design they will love to be seen with. Talk to the sales team here at The Printed Bag Shop today!