What Does the New Plastic Packaging Tax Mean for You and Your Business?

As the world begins to move in the direction of sustainability, we are starting to see changes that directly impact the way in which we live and operate. The UK pledge to slash emissions by 78% by the year 2035 is already showing that measures are being taken to push us into a greener society. In a bid to reduce the amount of plastic being produced, a new plastic packaging tax will be introduced from the 1st April 2022 as a new incentive to improve the amounts of recyclable plastics being used within packaging. 

The plastic packaging tax is being introduced as a measure to incentivise the use of recycled plastics over new plastic in packaged goods. This, in turn, is also thought to improve the amount of plastic waste being recycled and collected, reducing the damaging impact that plastics are having upon the environment. With harmful microplastics entering our food chain and being discovered within our drinking water, it’s no surprise that action is being taken to reduce the amount of new plastic being created.

It is emphasised that packaging should only contain recycled materials when permitted, for example food safety rules may mean that you cannot use recycled packaging on certain consumable items. 

The plastic packaging tax will be applied to goods that are manufactured within or imported into the UK and contain less than 30% recycled materials. Plastic is a malleable product and is incredibly durable and versatile, making it a great product to recycle. As plastic can take between 20 and 500 years to decompose and the burning of it releases toxic chemicals into the atmosphere, it makes a lot of sense to find a positive way to use its longevity to our advantage. 

The rate of the plastic packaging tax will be £200 for every metric tonne of plastic packaging containing less than 30% of recycled materials. You will be required to keep records of the plastic packaging that you manufacture or import and, in most cases, register for the tax. You will be required to register for the tax even if the packaging you manufacture/import contains more than 30% of recycled plastic. 

Check if You Need to Register to Pay the Tax

If you are a manufacturer or importer of ten or more metric tonnes of plastic packaging over a twelve-month period, then you will be required to register for the tax. THIS IS REGARDLESS OF WHETHER OR NOT YOU WILL BE REQUIRED TO PAY. This also includes cases where the packaging already contains goods, for example plastic bottles that are filled with drinks. If this is the case, the tax will only be applicable to the packaging itself. 

If you need to register for the tax then you will be required to pay the £200 per metric tonne, plastic packaging tax on any packaging that contains less than 30% recycled plastic. This means that if you manufacture ten tonnes of plastic packaging and only one tonne contains less than 30% recycled plastic, you will be taxed £200. 

If you are an importer or manufacturer of plastic packaging (including less than ten tonnes of plastic packaging) you will need to keep records of the packaging that you manufacture/import. For those who are manufacturing/importing less than ten metric tonnes, the amount of record keeping you will be expected to do is thought to reduce over time. 

Things You Can Do to Prepare

You will be required to evidence plastic content in order to establish whether you will need to pay tax. Taking steps to evidence the content of the plastics that you manufacture/import will enable you to stay on top of the new legislation. 

If you don’t account for tax on plastics that you supply to businesses, including fulfilment houses, then you risk those businesses being found secondarily/jointly and severally liable for the payment of any unpaid taxes. This could jeopardise your relationships with your customers so it’s vital that you ensure you are registered and ready to pay any necessary tax by the 1st April 2022.

If you aren’t responsible for the payment of tax on plastic packaging that is supplied to you, you need to establish that this is properly accounted for in order to prevent you from being held liable for the unpaid tax.

These measures, whilst frustrating, are aimed at positively benefitting the majority of people and will assist in securing a better future for the planet by reducing the amount of plastics that are infecting seas, rivers and oceans which, in turn pollutes land and plants, directly impacting our food chain and finally entering our systems which can be cancerous.