MHA | Deposit Return Scheme (DRS) - another example of tax and ESG

Deposit Return Scheme (DRS) - another example of tax and ESG

Alison Horner  February 27th 2023
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The Deposit Return Scheme (DRS) will come into force in Scotland from 16 August 2023. Under the DRS, a 20p deposit will be paid on the sale of a drink in certain single-use containers.

When an end-consumer returns a container to a return point, the deposit will be repaid to them. A factsheet was issued by HM Treasury which confirmed VAT will not be accounted for on a deposit at the point of sale and will only be due on unredeemed deposits (associated with unreturned containers).

Although the DRS will only apply to Scotland from 2023, it is expected to be rolled out to the rest of the UK with 1st October 2025 as an anticipated start date for the scheme.

Producers of such containers will need to be aware and will need to prepare for its introduction, whether that is this year or in 2025.

Draft legislation will be published for consultation following the Spring Budget on 15 March 2023.

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