Plastic packaging tax: is your business ready?

The government is bringing in a new, plastic packaging tax (PPT) on 1 April 2022 to combat the volume of single-use plastic waste. Make sure your business is ready for it

Disposal of single-use plastic is problematic because it either ends up in landfill, where it can take hundreds of years to disintegrate, is incinerated via waste-to-energy facilities, or too often ends up in nature, including our oceans and other waterways. 

Technically, single-use plastic can be recycled but often isn’t for a variety of reasons. Single-use plastic from bottles is easily recycled, however some types of packaging are made from a low-quality plastic, which, even when recycled, requires virgin plastic as part of the recycling process. This perpetuates the need for more fossil fuels.

The tax will apply to any plastic packaging that is produced in – or imported into – the UK that does not contain at least 30% recycled plastic

To combat the rising tide of unrecyclable plastic, the government has introduced a new tax, effective on 1 April 2022, to discourage the use of unsustainable materials and promote greener alternatives. 

The tax will apply to any plastic packaging that is produced in – or imported into – the UK that does not contain at least 30% recycled plastic. For the purposes of the new tax, plastic packaging is defined as packaging that is more than 50% plastic by finished weight.

PPT will be payable by the manufacturer or importer and will apply at a rate of £200 per metric tonne. So, if you manufacture 10 tonnes of plastic packaging, and one tonne of it contains less than 30% recycled plastic, your tax will amount to £200. However, the tax will not be due unless 10 tonnes or more of plastic packaging is imported or produced in a 12-month period.

PPT checklist

  • Determine whether your business or supply chain will be affected
  • Weigh up the potential financial impact on your business
  • Review the exact composition of packaging materials you use
  • Aim to phase out plastic packaging and replace it with more environmentally friendly materials
  • Register, and be prepared to file paperwork with HMRC
  • Prepare staff training and decide who will be responsible for compliance

Both manufacturers and importers will be liable, whether the plastic packaging is filled or unfilled. For example, if a business imports soft drinks in plastic bottles with less than 30% recycled content, then the plastic packaging will need to be declared to HMRC for the purposes of PPT.

Broad impact

Single-use plastics are so widely used that the tax will impact many sectors. Some of these include:

  • Retailers importing products such as bin liners, sandwich bags, water and carbonated drinks bottles, and carrier bags

  • Manufacturers making or importing plastic components for products

  • Publishers importing plastic to laminate books or to apply plastic sleeves on magazines

  • Transport providers importing plastic used in transportation, like bubble wrap or pallet wrap

  • Fresh food producers importing or manufacturing plastic packaging to seal their products

Record-keeping requirements

Registration for PPT is mandatory for any organisation that manufactures or imports more than 10 tonnes of plastic packaging over a 12-month period, regardless of the amount of recycled plastic it contains.

Even if PPT is not ultimately due, all organisations importing, or making plastic packaging must comply with HMRC’s record-keeping requirements, so it’s important to consider compliance obligations in advance.

Businesses that do come within the scope of PPT will likely need to update their systems to monitor and document the amount of plastic packaging they produce or import in order to fulfil their compliance obligations.

Find out more about the new PPT tax here.

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