Plastic Packaging Tax: Last chance to have your say

Gary Armstrong, Industrial Resource Management Lead at SLR, summarises his views on the five fundamentals of the proposed Plastic Packaging Tax to help you decide if you want to submit a consultation response before the deadline.

On 11th March 2020 HM Revenue & Customs released its Plastic Packaging Tax Policy Paper, which sets out how the new tax will be introduced in April 2022.

The objective of the policy is to “… provide a clear economic incentive for businesses to use recycled material in the production of 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” (1). The Chancellor of Exchequer, Rishi Sunak, suggested that the policy “… will increase the use of recycled plastic in packaging by 40% – equal to carbon savings of nearly 200,000 tonnes” (2).

This also commenced the 10-week consultation (3) period, set to end Wednesday 20th May 2020.

  • A £200 per tonne tax rate is proposed on manufactured or imported (filled or unfilled) plastic packaging with less than 30% recycled plastic content.
  • For plastic packaging produced the manufacturer of the primary product e.g. roll of film, pre-form bottle liable for the tax; for plastic packaging imported into the UK the first to ‘commercial exploit’ the packaging will be liable for the tax.
  • The tax will apply to the weight of packaging that is ‘predominately plastic by weight’. The total weight of multiple material packaging is included where plastic is the heaviest of the individual materials, plastic does not need to be greater than 50% of the weight of the total.
  • Businesses that manufacture or import less than 10 tonnes of plastic packaging (of any level of recycled content), in a 12-month period, will be exempt from the requirement to pay the tax. Disaggregation of companies will not avoid the tax as the 10 tonne limit uses the ‘connected persons’ definition from the Corporation Tax Act (4).
  • Plastic packaging that is manufactured or imported to the UK to be exported directly to an overseas customer will be exempt from the requirement to pay the tax.