Where your 5p plastic bag charge is really going

Retailers must keep track of how many plastic bags they’ve given out and where the proceeds have gone

Tesco is keeping about 1p from every 5p plastic bag charge to “cover reasonable costs”, according to reports (Getty Images)

When the Government introduced a 5p charge for plastic bags in October 2015, it said that retailers should pass on the money to charities and non-profits.

The Government has said that retailers must keep track of how many plastic bags they’ve given out and where the proceeds have gone.

The only money from the charge that retailers can keep are those “reasonably incurred completing transactions, communicating information, obtaining expert advice or carrying on similar activities to enable the seller to comply”.

The cost of producing the bag is not considered a reasonable cost.

Tesco sends 3.4p of every 5p to local grants for environmental improvement works through Bags of Help. Another 0.83p goes on VAT.

Of the remaining 0.77p, 0.354p, or about 7 per cent of the 5p, is paid to Groundwork to run the scheme.

This year Tesco has spent around 0.416p of each 5p setting up its tills, communicating the change to customers and colleagues so that they don't forget their bags.

Sainsbury’s did away with single-use plastic bags in favour of a sturdier orange bag that can be recycled and exchanged for a new one when it becomes damaged.

The Guardian has reported that 1p of the 5p the bag costs go to charity, which is lower than some other retailers.

Sainsbury’s said that it couldn’t confirm how much it gives to charity because the information was “commercially sensitive”. A spokeswoman confirmed that Sainsbury’s doesn’t make any money from its carrier bags and that all profits are donated to local causes, such as charities and hospices.

Asda said the 5p bag charge less VAT, or 4.16p a bag, will be donated to charities and good causes in England.

Proceeds from Asda carrier bag sales in England over the next year are going to help fund the construction of a new dementia research centre in London.

Morrisons is donating 5p less VAT, or 4.16p a bag, to the Morrisons Foundation.

(GETTY IMAGES)

Morrisons has also published the amount it earned from similar schemes in Wales and Scotland. In Wales, Morrisons made £479,822 out of the 5p bag charge between 2014 and 2015 and donated £399,851 to charity. The remainder went on VAT.

Waitrose said: “Every penny raised from the sale of carrier bags at Waitrose branches in England will go into a new community and environmental fund - with no deduction for costs.

“For the first year we'll be joining with a number of other supermarkets to give the money in this fund to a new world centre of excellence which is being created at University College London, for the care, treatment and prevention of Alzheimer's.”

Aldi has charged for plastic bags since it first opened in the UK in 1990. It increased the rate from 3p to 5p in July 2015, slightly ahead of the minimum 5p charge introduced by the Government in October.

Aldi said it donates “every penny” it makes from carrier bags to the RSPB for three years from July 2012, which is expected to bring in around £2 million for charity.

Lidl also charged for plastic bags before the Government’s levy.

It has committed to donating a minimum of £1million over a 12 month period, with the proceeds from its single-use carrier bags to be split equally between both Keep Britain Tidy and the children and young people’s cancer support charity CLIC Sargent, Lidl UK’s ongoing partner.