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What is the plastic packaging tax? Everything you need to know before April 2022.

August 24, 2021

Our in-depth guide to the forthcoming plastic packaging tax and how this initiative will impact UK businesses.

On 1 April 2022, a new law will come into force dubbed the plastic packaging tax. It applies to plastic packaging produced in, or imported into the UK, which does not include at least 30% recycled plastic, but importantly will only apply initially to packaging that is predominantly plastic by weight. For UK manufacturers, the tax will apply at the manufacturing stage. For importers, the tax will be liable whether they packaging is filled or unfilled.

 

How much is the plastic packaging tax?

The rate of tax will be £200 per metric tonne of plastic packaging, where the packaging contains less than 30% recycled plastic material.

 

Will the new plastic tax apply to my business?

According to the gov.uk website, the tax will affect:

  • UK producers of plastic packaging, manufacturing more than 10 tonnes of plastic packaging per 12 months
  • Importers of plastic packaging, importing more than 10 tonnes of plastic packaging per 12 months. This includes the import of packaging which already contains good such as plastic bottles filled with drinks for example
  • Business customers of producers and importers of plastic packaging
  • Consumers who buy goods in plastic packaging in the UK.

 

The tax will only be relevant on plastic packaged products or empty packaging which contain less than 30% recycled plastic. It will also not affect packaging which is not predominantly plastic by weight, including cardboard and paper alternatives with some plastic features for example.

 

By definition, the tax affects all plastics, including bioplastics which are cited as biodegradable, compostable and oxo-degradable plastics. It is however focussed on packaging specifically, defined as “the containment, protection, handling, delivery or presentation of goods at any stage in the supply chain of the goods, from the producer of the goods to the consumer or user”, rather than on specifically plastic items.

 

The government has added a caveat for plastic packaging which is regulated in other ways, highlighting that it will not take precedence over other regulations such as those covering food safety. It has also listed further exemptions on the gov.uk website…

 

How will the tax operate?

Businesses who are liable for the new plastic tax under the conditions set out above, will be required to keep records and, in most cases, register for the tax even if 100% of their products meet the required 30% recyclate minimum.

 

The new tax will come into effect on 1 April 2022, and the system for registering for the tax will go live at the same time. Businesses will have 30 days to notify government that you are liable for the tax, as set out here…

 

The government has issued guidance on getting your business ready for the 1 April 2022, including encouragement to adopt more recycled plastic, over on the gov.uk website…

 

Targeting sustainability:

The core priority for the new legislation is to encourage the use of recycled materials in the manufacture of new plastic packaging, both to stimulate demand for recycled materials while reducing demand for the production of virgin plastics. In turn, it is hoped this will help tackle the mounting problem of waste plastics, which are clogging landfills, overseas waste plants, and increasingly spilling into the environment, without turning to incineration or long-term storage.

 

According to the government consultation, it is not expected that the tax will have any lasting economic effect, but will stimulate behavioural changes as a result of policy. Even if manufacturers and importers pass on the full cost of the tax to consumers, it should have minimal effect on overall costs as the packaging accounts for such a small percentage of the cost of each product sold. Encouraging demand for plastics which contain a high value of recyclate will therefore serve to improve the sustainability of the plastics, without significantly driving up costs.

 

Where did the plastic tax come from?

In line with environmental targets and ambitions, the Budget 2017 included a call for evidence into using the tax system to tackle single-use plastic waste and received 162,000 responses. At Budget 2018 the new tax was announced and a consultation was launched in February 2019 inviting input into the tax structure. Paving legislation was then put into the Finance Bill 2020 and a further consultation was launched in 2020 to garner feedback on the key features of the tax. This consultation has now closed, and review of the feedback will ultimately determine the final features of and processes for the tax.

 

How we can help?

Printwaste provides a high-quality, environment-focussed business recycling and waste management service, helping convert recyclables into newly reusable products; as well as diverting waste materials away from landfill and minimising their environmental impact in the process. Printwaste also provides a free-of-charge consultancy and audit service to help maximise your businesses recycling rates as well as streamline your waste management system and costs. Speak to our sales team on 01242 588 600 for more information.

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