Policy paper

VAT provisions for Deposit Return Schemes (DRS)

This measure introduces new VAT accounting rules for supplies made under a statutory Deposit Return Scheme (DRS).

• From: HM Revenue & Customs
• Published: 13 July 2026

Documents

VAT provisions for drink Deposit Return Schemes

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Draft legislation

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Draft legislation (accessible version)

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Explanatory note

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Details

Under a Deposit Return Scheme (DRS) a refundable deposit is added to eligible drinks containers, which consumers get back when they return the empty container.  

This measure changes the VAT accounting rules that apply to those deposits. 

Producers and importers will no longer be required to account for VAT on DRS deposits. 

Instead, the scheme administrator will account for VAT on deposits. VAT will only be due on deposits that are not returned to the consumer.

Published 13 July 2026