Deposit return scheme (recycling) - Part 2

From Chartered Accountants Ireland:

Apr 02, 2024

Revenue has published a new Tax and Duty Manual to provide guidance on the VAT treatment appropriate to Deposit Return Scheme (DRS) refunds. The DRS came into operation on 1 February 2024 and provides for a small refundable deposit on drink products supplied in plastic bottles and aluminium or steel cans. The deposit is refunded to a person who returns an empty container to the DRS for recycling or reuse. 

Section 92A VATCA 2010 legislates for the VAT treatment of the DRS. Because it is not possible for businesses in the supply chain (e.g. manufacturers, importers, wholesalers, retailers) to know at the time they make their supplies whether or not containers will eventually be returned when they are empty, no VAT arises on supplies of drink products in the supply chain. VAT on the deposit only arises where the container is not returned under the DRS, in which case it is the Scheme Operator, Re-turn, who is liable to account for and pay the tax. Re-turn was appointed by the Minister for the Environment, Climate and Communications to operate the DRS.  

Yeah there's some misinformation on the thread alright. A lot of it emanating from Re-turn.

And yesterday you were claiming 'Not for EU' labelling could materially hinder ROI shoppers buying Re-turn products in NI. When asked to support that… you provided exactly nothing despite multiple posters querying you on it.

Posters asking about manual returns … somehow you directed the conversation to Brexit without cause.
Posters asking about increases in prices coincident with Return being rolled out… somehow you directed the conversation to the war in Ukraine without cause.
Ring any bells?

Stick to the facts indeed. The information in self serving press releases from the laughing jackasses in Return and the Green Party are not facts.

And you haven't actually said what Return is?

It is worse than a Quango. A Quango would be more accountable.

Irrelevant.

I wasn't disputing the mechanics of the charging system; I said there has been a product price increase, where at least some DRS products are concerned.

The info you posted would be equally applied to DRS products, if there had been no increase in product price.

In other words, the extract makes no judgement on whether or not the deposit is added to the original product price, or is absorbed into the current product price.

No more comments from me on this one sorry, you either get it, or you don't.

Re-turn is not a quango and no state money was provided to set it up.

Your DOE theory is made up stuff.

The Deposit Return Scheme will help reduce single-use plastics, help Ireland meet EU targets, and move towards a circular economy where valuable resources are re-used or recycled as much as possible."

If that was the plan, why did they not bring the deposit on to plastic bottles and leave cans alone?

Thats rhetorical question. The answer is obvious, the cans are valuable.

Look at any price display, or any purchase receipt. That will tell you whether the deposit has been added to the original product price. It hasn't, they are shown separately as the product price and deposit price.

Any accountant will tell you the same.

You forfeit the deposit…

Honestly, there are issues with the deposit scheme that are genuine.

People calling it a price increase destroys any credibility to the arguments and makes those people look stupid.

I don't say gas price has doubled if I have to buy a canister, I don't count the deposit as part of the price if I'm renting equipment, I don't say rent has doubled because I pay a deposit in the first month.

This facade is not. We both know that already.

But there is a deposit on every can and bottle I buy which I cant return, so for me it is a price increase. Why is this so difficult for people like you to understand?!?

And I gave examples of prices decreases since February. But I did not link that to DRS, because I don't know the reason. I just wanted to show that the particular product I know about was reduced in price.

Have you got evidence to show that the Lucozade price increase was due to an "opportunity" taken by anyone in the supply chain? Did you ask any of them for an explanation?

The only reference I made to July (I should have said June) 2025, was the variability in sales at different times of year. DRS want to wait to use a full year's figures. The accountants agree with another point I made. Nobody knows when or if any container will come back. I don't have tens of "issues" with the scheme. I don't worry about stuff which annoys some other people.

"Because it is not possible for businesses in the supply chain (e.g. manufacturers, importers, wholesalers, retailers) to know at the time they make their supplies whether or not containers will eventually be returned when they are empty, no VAT arises on supplies of drink products in the supply chain."

It has been added to the original cost of the product.

If the 4 pack of coke was 6 euro before DRS, it is still 6 euro on the shelf after DRS.

But the total price at checkout after DRS is 6.60, 15c × 4 for the cans.

You called it a "deposit" in your previous post. The one which followed on from the one which you declared would be your last contribution to this topic. What was in your mind when you used the word deposit?

If you are not going to play the game any more that will make me sad. It's a shame for you that your summoning up of the accountancy profession blew up in your face.

I explained why your accountant post was irrelevant.

Others will understand the logic, even if you dont. But good luck anyway.

You could try checking the barcode on the Re-turn website checker.

If it's not there Croke Park owe you 15 cent and have questions to answer.

Imagine in the business world, if you issued a tender for the provision of a service, and the winning bidder stood to make tens of millions per year, as well as gaining total access to valuable recycling materials and having a captive market with no competition, your customers have no choice.

In my experience of projects, you would be looking at a minimum of a biweekly cadence to track progress and ensure things are being done correctly. All data, whether it's data you like or not, would be available at the click of a button, all numbers could be reported on in a heartbeat. Issues would be identified quickly and processes put in place to rectify them. Remember, tens of millions of euro per year.

If you can't do this, you would be out on your ear with a cancelled contract.

But of course the poor craythurs in Return have only had six months of a live system, preceded by more months of trialling and bedding in, preceded by benchmarking the best systems in the world, preceded by a public consultation (hahahahaha). I mean just because the rest of the world act like grown up business professionals doesn't mean Return have to, right?

So here we are, after all of the recent shenanigans.

What is the collection % versus sales?

Nobody knows.

What percent of collections have been recycled?

Nobody knows.

Where were they recycled, if they were?

Nobody knows.

How much do they pay themselves?

Nobody knows.

What about disabled people?

Nobody knows or cares.

Why are rhere STILL issues with broken machines, tickets not scanning etc?

Nobody knows or cares.

Why havent we an app to get electronic refund? Nobody cares.

I would be behind this fully if it was done right, but it wasnt, it isn't and i doubt it ever will be done right. Once those millions in unclaimed deposits keep rolling in, they're on a winner.

Theft, simple state sponsored theft. With the added bonus of all the environmental damage too.

You being unable to follow the deposit system does not make it a price increase.

If you lost your gas canister, would you also call that a price increase when you next buy one?

This has gone beyond the realms of stupidity and into thick-headedness.

If Nobody Knows then it is not possible for anyone to give information.

Sure all they'll every say is "due to increased costs" or some such vague nonsense - they'd never link it to being opportunistic and taking advantage of the publics confusion over the ins and outs of this scheme…… You do accept this point - right?

Are you gullible enough to think that any company would admit publicilly this?

The example you gave (which I don't remember fully - think it was some niche product) - have you gotten evidence that the price DECREASE is anything to do with the DRS?

I am certain that other posters here will give a list of price increases since the start of this year to counter any minimal isolated price reduction……

So have you any issues at all with the scheme? Do you see any areas for improvement? I find it unusal that someone, who has engaged with the scheme doesn't seen any areas for improvement from day one and even stranger still that they are happy enough to continue to let things slide until mid next year…..

Whoosh!

If it is due to increased costs, then that would be the reason. That is not a vague idea, an increased cost is an increased cost.

Of course it's a vague reason - the very fact that you accept it as a reason is enough.

Another reason to increase the price of the item is to take advantage of consumer confusion to increase profits- no company would ever admit this.

Every company is looking to increase profits - using a time of increased consumer confusion to increase their product price is a great way of doing this.

So you still haven't agreed about where the 15 cent would come from ?

Colour me shocked 😊

Simply untrue.

The 15 cent will drop for you but only if you pay it upfront on purchase. That's the only way DRS can work.

Are you leaving again ?

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