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Introduction of Plastic Packaging Tax

The introduction of a Plastic Packaging Tax in the UK on 1 April offers greater financial incentives for businesses to move towards recycled plastics. Here we identify key points around what the tax involves, who is affected and any exemptions.

Words:
Molly Cosgrove
Images:
Shutterstock
Plastic packaging
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The UK Government introduced the plastic packaging tax taking effect from 1st April 2022. The tax provides a clear economic incentive for businesses to use recycled plastic when manufacturing plastic packaging, creating greater demand for the material. In turn this will encourage increased levels of recycling and collection of plastic waste, diverting it away from landfill or incineration.

Key points

  • The rate of tax will be £200/tonne on plastic packaging manufactured in, or imported into the UK, that does not contain at least 30% recycled plastic.
  • The definition of plastic includes bioplastics (including biodegradable, compostable and oxo degradable plastics)
  • Plastic packaging is defined as packaging that is predominantly plastic by weight.
  • Imported plastic packaging will be liable to the tax whether the packaging is unfilled or filled.
  • There will be an exemption for manufacturers and importers of less than 10 tonnes of plastic packaging per year.

Who is affected?

The new tax will affect a wide range of businesses, such as UK manufacturers of plastic packaging, importers of plastic packaging, business customers of manufacturers and importers of plastic packaging, and consumers who buy plastic packaging or goods in plastic packaging in the UK.

Exemptions

Products not subject to the tax:

  • Products designed to be suitable to contain goods at the time of sale to the consumer or user.
  • Products designed where the packaging is an integral part of the goods and are necessary to enable the goods to be used by the consumer or user.
  • Products which are primarily designed to be re-used for the presentation of goods to a consumer or user and have been permanently set aside for this purpose, before or as soon as they have been manufactured or imported.

Forms of plastic packaging not subject to the tax:

  • Plastic packaging manufactured or imported for use in the immediate packaging of a medicinal product
  • Transport packaging used on imported goods
  • Packaging used as aircraft, ship, and rail stores
  • Components that are permanently designated or set aside for use other than a packaging use

Despite the potential exemptions from the Plastic Packaging Tax, there may still be record keeping and reporting requirements for some businesses.

Keeping records

All businesses that manufacture or import plastic packaging should make sure they have the information needed to understand how much tax they must pay.

The records should show the:

  • Total amount in weight and a breakdown by weight of the materials used to manufacture plastic packaging, excluding packaging which is used to transport imported goods
  • Data and calculations used to determine if a packaging component is, for the most part plastic, and how much recycled plastic it contains (for imported packaging, details of recycled plastic content must be obtained from the overseas manufacturer by the liable business in the UK)
  • Weight of exempted plastic packaging and reason for exemption
  • Amount in weight of plastic packaging exported, and therefore the allowed relief from the tax

 

We work with organisations across every sector to help measure and reduce their waste, including plastics, as part of their commitment to reducing their carbon footprint annually. 

Going above and beyond 30% of recycled plastic used in packaging will contribute more to the circular economy for recycled plastic. It, in turn, creates greater demand for the material while diverting plastic waste out of landfill.  

We encourage all organisations to look at replacing their packaging with recycled plastics where possible. Not only will you be contributing to the circular economy for recycled plastics but, for companies who the new tax directly impacts, it can significantly reduce costs.  

 

For guidance on how you can reduce your plastic waste, get in touch with us here.  

More information about what is required for the Plastic Packaging Tax is available at gov.uk.