PLASTIC - 24.08.2021

Plastic tax - what’s to know?

A tax on plastic comes into force in April 2022. What do we know so far and how can you keep up with further changes and guidance?

New tax. The UK plastic packaging tax (PPT) will come into force on 1 April 2022. It will apply to plastic packaging manufactured in, or imported into, the UK that does not contain at least 30% recycled plastic. The aim is to create more demand for recycled plastic (rather than virgin plastic) to be used in packaging. This means that if you produce or use plastic packaging that does not contain at least 30% recycled material, you will have to pay £200 per tonne of packaging.

Note. Businesses that manufacture or import ten or more tonnes of plastic packaging a year will need to register for PPT, regardless of whether they have to pay it or not. The online service to register and pay will be available in April 2022 when the tax takes effect.

Complicated business. More details of the tax are available on the government’s website (see The next step ). In July 2021 updated guidance for businesses was published (see The next step ). This covers what those manufacturing or importing plastic packaging need to do. The guidance provides important clarifications and introduces three new categories of exemption. This covers quite a bit of ground - from where the tax is applied and the definition of “recycled plastic ” to more specific questions about certain polymers and packaging with multiple components.

Note. The primary legislation forms Part 2Finance Act 2021 . Secondary legislation will be introduced later in 2021. Until the secondary legislation takes effect the guidance is subject to change.

Tip. Start preparing your business for the plastic tax. For example, the price of the packaging you currently use may well go up if it falls under the tax. Ask your suppliers what they are doing to prepare, e.g. using more recycled content or changing materials, so you understand what your options and the costs are.

For a link to the government’s website and to the guidance, visit https://www.tips-and-advice.co.uk , Download Zone, year 16, issue 03.

Check government guidance to see how the tax may affect you. Businesses that use packaging should also start preparing, e.g. by asking suppliers what packaging will be subject to the tax and what the alternatives are.

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