TAX - 01.06.2020

Changes to proposed plastic packaging tax

Plastic tax. From April 2022 those producing, using or importing plastic packaging that contains less than 30% recycled plastic will be taxed. The current consultation on the proposed details of the tax runs until 20 August 2020, giving a three-month extension due to the coronavirus pandemic. It suggests a tax rate of £200 per tonne of plastic packaging.

What's coming? Some other changes have been added to the consultation since it was first released, including: (1) the scope of the tax now includes imported filled plastic packaging, rather than just imports of unfilled plastic packaging; (2) plastic is now defined as a material consisting of a polymer. A revised definition means that mixed material packaging, where plastic is not the main component but is still the predominant material by weight, will be considered as plastic for the purposes of the tax; (3) the revised definition also narrows the natural polymer exceptions to those which are "cellulose-based" to avoid instances of novel plastics or blends being developed to avoid the tax; (4) packaging that is purely used to transport imported goods is not in the scope of the tax; and (5) if you're only manufacturing and/or importing less than ten tonnes of plastic packaging during a twelve-month period, you're exempt from the tax.

Draft legislation is set to be published later in 2020. This will include details on who will be liable to pay the tax and how it will be collected.

The £200 per tonne tax is not likely to change and, depending on how much plastic packaging you use, it could become a hefty additional cost. Now is the time to look at alternative packaging options, including cardboard or bio-based materials.

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