Plastic packaging can consist of many different components.
For example, a water bottle is typically made up of three different components – the bottle itself, the bottle lid, and its label.
And during transport, it may be held inside another layer of plastic packaging.
When calculating the total amount of Plastic Packaging Tax for this item, each of these components need to be considered.
Before importing or manufacturing an item with one or more plastic packaging components, check whether each component subject to the Plastic Packaging Tax.
What is Plastic Packaging tax?
As of April 2022, every finished plastic packaging component (that fits the criteria) will be subject to the Plastic Packaging Tax.
There are two types of packaging subject to the tax. These are:
packaging made for use in the supply chain
packaging made for single use by the consumer
For packaging that consists of several different packaging components, the Plastic Packaging Tax must be accounted for on each individual component.
Why has the Plastic Packaging tax been introduced?
At Budget 2017, the UK government received 162,000 responses after calling for evidence into using taxes to combat waste caused by single-use plastics.
Roughly 5 years later, the tax is being introduced for plastic components that are used in packaging in the supply chain or for single use by the consumer and consist of less than 30% recycled plastic.
By introducing this new tax, the government hopes to offer businesses an incentive for increasing the amount of products they make using recycled materials in a bid to reduce the amount of plastic that ends up being incinerated or in landfill.
Packaging made for use in the supply chain
A plastic packaging component is a product used to contain, handle, present, deliver or protect goods in the supply chain.
Examples include plastic packaging used to contain raw meat during transportation, or packaging used to contain food.
Packaging made for single use by the consumer
In terms of Plastic Packaging Tax, packaging made for single use by the consumer is packaging used to contain, handle, present, deliver or protect consumer goods / waste.
Plastic backs, gift wrap or disposable cutlery would all be considered examples of single use packaging that is subject to Plastic Packaging Tax.
When is packaging not subject to Plastic Packaging Text?
The four types of packaging that are exempt from Plastic Packaging tax include:
Products used in stores for aircraft, rail goods and ship stores
Products used as transport when importing goods into the UK
Products used for immediately packaging licensed medicine for humans
Products which are recorded as being used for non-packaging purposes
Additionally, plastic packaging that consists of 30% recycled plastic (or more) will also be exempt from the tax.
(To calculate the percentage of recycled materials used in your packaging, click here.)
However, they count towards the 10-ton threshold for all of the packaging your business imports/manufactures in a 12-month period, and therefore records of this packaging must still be kept.
For more information about when packaging is exempt from the tax, see the UK Government guidelines.