The government is launching a deposit return scheme (DRS) for drinks containers, due to go live in England, Wales and Northern Ireland in late 2024. The Scottish government’s own scheme will come into force in Scotland in August next year. While the DRS aims to dramatically increase the proportion of containers returned and recycled, one policy decision in particular threatens to punish consumers and businesses alike for doing the right thing.
The scheme will involve consumers being charged a sum of money as a deposit upfront when they buy a container, to be redeemed when it is returned empty. In Scotland, the deposit fee has been set at 20p.
As it stands, the government intends to apply VAT to deposits collected as part of the recycling initiative.