Retailers Guide to the Environmental Levy on Plastic Bags
Levy at the Point of Sale
What is the environmental levy?
It is a levy which was introduced by the Department of the Environment, Heritage and Local Government as a means of reducing the consumption of plastic shopping bags. The amount of the levy was initially 15 cent per bag. The levy was increased to 22 cent per bag on 1 July 2007. Retailers supplying plastic shopping bags to customers will charge the levy at the point of sale.
When was it introduced?
It was introduced on 4 March 2002.
Is the levy charged on all types of plastic bags?
No. Certain types of plastic bags are excluded from the levy, as set out in the
Regulations
. Broadly the exclusions cover re-usable shopping bags which are sold for 70 cent or more, bags used solely to contain fresh meat, fish, ice or poultry (whether packaged or otherwise) and bags used solely to contain loose fruit and vegetables and other foods that are not otherwise packaged.
How will a customer know that the levy has been imposed on plastic bags supplied to him/her?
The retailer is obliged to pass on the levy to the customer and the levy will have to be itemised on any invoice, till receipt or docket issued to the customer.
Who does the retailer pay the levy to?
The levy is to be paid to the Collector-General.
Is the levy subject to VAT?
No. When calculating a VAT liability, retailers who account for VAT under a retailer's scheme should simply exclude the levy from the turnover figure. Retailers who do not use a retailer's scheme should ensure that the levy is not included in the taxable amount for VAT.
Is there a return form for Retailers?
Yes. The Collector-General issues a return form to each retailer identified as likely to have a liability.
Quarterly Remittance
If a retailer does not receive a return form from the Collector- General, what should he/she do?
The retailer should contact the Environmental Levy Section of the Collector-General's Office (address below). This section will arrange to have the trader registered for the levy and issue the necessary return forms to him/her.
If a retailer receives a return form from the Collector-General but has no liability to the levy, what should he/she do?
The retailer should make a "nil" return to the Collector-General's office using the return form. If the retailer never supplies plastic bags to customers he/she should advise that office accordingly in writing, so that the need to complete future returns can be avoided.
If a retailer receives a return form from the Collector-General but has no liability to the levy, what should he/she do?
The retailer should make a "nil" return to the Collector-General's office using the return form. If the retailer never supplies plastic bags to customers he/she should advise that office accordingly in writing, so that the need to complete future returns can be avoided.
When is the return and payment due?
The return and payment will be due on the 19th day of the month following the end of an accounting period. The first accounting period commenced on the fourth day of March 2002 and ended on the last day of June 2002. Accordingly, the first return and payment were due on 19 July 2002. Thereafter, accounting periods are for periods of three months ending in each quarter of the calendar year i.e. periods ending 30 September, 31 December etc.. Retailers who pay less than €1000.00 in total, over four consecutive quarters, will have the option of becoming annual filers. Completed return forms including payment authorisation, must be returned to the Collector-General on or before the 19th of the month following the end of each accounting period.
How is the levy paid?
The retailer sends the completed return form declaring the amount due. On the return the retailer must specify the details of the bank account from which the levy is to be deducted. The Collector-General will then debit the amount due from the retailer's bank account.
What if the retailer changes the bank account?
The retailer should indicate the revised bank account details on the next relevant return.
Shop for the Environment
Can the retailer pay by cheque or cash?
No. The method of payment, electronic debiting of retailer's bank account, is specifically provided for in the legislation in relation to the levy. This method of payment is cheaper and more efficient than paying by cheque. Government policy is to move towards electronic banking and away from cheque payments.
Can the return for the levy be made through the Revenue On-line Service (ROS)?
Yes.
What are the benefits of using ROS ?
ROS ensures safe, secure and confidential access to Revenue on a 24 hour basis throughout the year, faster processing of returns and payments with instant acknowledgment. Payment through ROS can save time and money and can be made on line by Laser or ROS debit instruction.
What happens if a return is not made?
Revenue can estimate the amount of levy payable for the period if no return is received. Notice of the amount estimated is then served on the retailer and is collectible by Revenue.
What happens if the levy is not paid?
In fairness to those persons who meet their obligations, Revenue will ensure that early and effective action is taken against those who have a liability to the levy and fail to pay. The methods of recovery for the levy will be the same as for taxes, viz. sheriff enforcement, civil proceedings for recovery through the Courts and attachment of third parties. Other enforcement methods will be used if necessary.
What records have to be kept by retailers?
Details of the records required to be kept are set out in the Regulations in relation to the levy. The record keeping requirement has been framed to minimise the compliance burden on the legitimate trader while at the same time ensuring that levy evasion can be combated. The basic requirements are an opening stock take of plastic bags when the levy was introduced, a record of plastic bag purchases and a record of plastic bags supplied to customers where the levy applies. The records must differentiate between
- those plastic bags used to contain fresh meat, fish, ice, poultry, fruit, vegetables and other foods that are not otherwise packed, and
- other plastic shopping bags.
Will Revenue carry out checks in relation to the levy?
Revenue will carry out checks on a selective basis, in order to ensure full
compliance with the Regulations. The Regulations also provide powers for Revenue to seek information from and inspect the records of persons supplying plastic bags to retailers. This information is required for the purpose of checking the veracity of retailer's records. In addition to Revenue's checks at retail level, local authorities have a role in
ensuring compliance with the levy. This principally consists of:
- Ensuring that the levy is charged by accountable persons to their customers
- Taking appropriate action in cases where it has been established that the levy has not been so charged
- Maintaining continued public and business awareness in relation to the levy
What happens if the checks uncover undeclared amounts?
The undeclared amounts plus any appropriate penalties will be payable. In the absence of agreement on the amount concerned, Revenue has the power to make an estimate, subject to appeal, which becomes payable and enforceable as necessary.
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Further Information
Further information on collection issues can be obtained from:
Services and Transactions Taxes Unit,
Collector-General,
Mill Lane,
Listowel
Co Kerry
Lo-Call: 1890 20 30 70.
E-mail: elevy@revenue.ie
Office of the Collector-General,
January 2010