New UK Plastic Tax from April 2022

Understanding the New Plastic Packaging Tax Applicable from April 2022

It is estimated that about 20,000 producers and importers of plastic packaging are to be impacted by the Plastic Tax from April 2022

As of April 2022, UK manufacturers of plastic packaging, any businesses that buy plastic packaging, those that import plastic packaging, and consumers who purchase goods in plastic packaging will be taxed if the plastic packaging contains less than 30% recycled plastic. Filled and unfilled packaging will both be taxed.

The legislation defines ‘Recycled plastic’ as plastic that has been reprocessed from recovered material by means of a chemical or manufacturing process so that it can be used either for its original purpose or for other purposes.

Key Features of The Plastic Packaging Tax include:

  • £200 per tonne tax rate for packaging with less than 30% recycled plastic
  • An exemption for business which manufacture and/or import less than 10 tonnes of plastic packaging in a 12-month period
  • Scope of the tax by definition of the type of taxable product and recycled content
  • Liability to pay the tax and the need to register with HMRC
  • How the tax will be collected, recovered and enforced

"The tax will provide a clear economic incentive for businesses to use recycled material in plastic packaging, which will create greater demand for this material and in turn stimulate increased levels of recycling and collection of plastic waste, diverting it away from landfill or incineration."

HMRC

What does the new UK Plastic Packaging Tax mean and wow will effect businesses?

Importers and producers of small quantities of plastic packaging will be exempt from mitigating against disproportionate administrative burdens. The tax won’t apply to plastic packaging that isn’t predominantly plastic by weight or contains over 30% recycled plastic.

It also won’t apply to packaging of licensed human medicines, transport packaging to import products into the country, and exported (filled or unfilled) plastic packaging.

Whilst the tax will predominantly impact those business mentioned above, the tax is likely to impact the waste and recycling sector. Such as landfill tax, which was introduced as an indirect taxation, rather than just the PRN system, to boost recycling.

Importers and producers of small quantities of plastic pack-aging will be exempt from mitigating against disproportion-ate administrative burdens.

“Recycled plastic has a carbon footprint that can be up to four times lower than that of virgin plastic. The policy may also help to divert plastics from landfill or incineration, and drive recycling technologies within the UK.”

HMRC

What does the Plastic Packaging Tax mean for you?

ERA work with clients as an extension of your business, creating bespoke solutions that best suit your needs. Whilst we can’t change the legislation, we can establish if there are solutions available so that you conform with it. Contact us today so that we can open discussions about how best we can work together.