Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether she has made an assessment of the potential impact of applying VAT to deposits in the Deposit Return Scheme on (a) return rates and (b) levels of (i) litter and (ii) recycling.

The Government remains committed to successful implementation of the Deposit Return Scheme, which is a critical step in moving towards a circular economy that delivers sustainable growth and produces less waste, rubbish, and litter.

The Government is keen to ensure that VAT is not a barrier to effective operation of the Deposit Return Scheme. The Government is considering how best to achieve this while maintaining the integrity of the tax, and this work is being supported by engagement with industry representatives, including the British Soft Drinks Association.