What Is Plastic Packaging Tax?

As many countries are becoming more conscious and aware of their environmental footprint, the UK is no exception. To lessen environmental impact the UK Government is introducing a Plastic Packaging Tax.

This creating the question, what is ‘Plastic Packaging Tax’ and how will it affect me?

What is the Tax?

The Plastic Packaging Tax is a new tax coming into effect in April 2022 that will apply to plastic packaging that is manufactured in or imported into the UK, that doesn’t contain at least 30% recycled plastic, being taxed at £200 per tonne.

Plastic packaging is deemed packaging that is predominantly plastic by weight.

The tax will not apply to any packaging containing 30% or more recycled plastic or any packaging that is not predominantly plastic by weight (more than 50% of packaging weight is plastic).

What is the aim of the tax?

The primary aim is to provide a clear, financial incentive for businesses to utilise recycled plastic or alternate materials. In turn the hope is this will stimulate increased recycling and collection of plastic waste, avoiding landfill or incineration.

Who is likely to be affected?

UK manufacturers and importers of plastic packaging, as well as consumers who buy plastic packaged goods are most likely to be affected.

It is likely that in order to offset this additional cost manufacturers and importers will increase prices; however, to mitigate drastic price increases the Government have included an exemption to this tax for manufacturers and importers of less than 10 tonnes of plastic packaging per year.

What costs am I likely to face?

The tax is expected to impact approximately 20,000+ manufacturers and importers of plastic packaging.

There are likely to be a range of initial costs to businesses:

• Regulation familiarisation
• Staff training
• HMRC registration
• Development of required reporting framework for completing tax returns.

Whilst there are also likely to be several ongoing costs:

• Completing, filing and paying tax returns
• Keeping and updating appropriate records
• Amending returns
• Supply chain auditing for due diligence