OSA Members meeting highlights UK Plastic Packaging Tax
New UK Plastic Packaging Tax
A new Plastic Packaging Tax will take effect from 1 April 2022. Its purpose is to encourage the use of recycled rather than new plastic within plastic packaging.
Although the primary legislation for Plastic Packaging Tax is already in law, it forms part 2 of Finance Act 2021, secondary legislation which implements it has not yet been introduced. This means that although the government has published guidance for businesses on what they must do and how to get ready for the new tax, some of those details may change. The government has said it will publish further guidance later this year.
This briefing highlights the current position and provides links to government guidance and websites. It will be updated as and when further information becomes available.
What it applies to:
The tax will apply to plastic packaging manufactured in, or imported into, the UK where the plastic used in its manufacture is less than 30% recycled.
Plastic includes bioplastics, including biodegradable, compostable and oxo-degradable plastics.
Packaging that is made of multiple materials but contains more plastic by weight than any other single substance will be a plastic packaging component for the purposes of the tax.
The rate of the tax will be £200 per metric tonne of plastic packaging.
When it applies:
A plastic packaging component is chargeable for Plastic Packaging Tax when it’s finished.
If your business is in the UK, you will be liable as a manufacturer for Plastic Packaging Tax if you perform the last substantial modification before the packing or filling process. Therefore, if you pack or fill the packaging, you will only be liable for Plastic Packaging Tax if you also undertake a substantial modification before the packing or filling process.
However, if your business imports plastic packaging components which have already undergone their last substantial modification, they will be considered finished, and you will be liable for Plastic Packaging Tax.
It is important to note that this new tax includes importers of packaging which already contains goods, such as plastic bottles filled with drinks. Where the packaging you import already contains other goods, the tax only applies to the plastic packaging itself.
Who it applies to:
If you are a business that manufactures or imports 10 or more tonnes of plastic packaging over a 12-month period you will need to register for the tax. This is regardless of whether you will have to pay any tax. The online service to register and pay will be available on 1 April 2022 when the tax takes effect.
If you are a business that manufactures or imports less than 10 tonnes of plastic packaging a year, there will still be some record keeping requirements to demonstrate that you are below the tax threshold, and check if you become liable in the future.
The government is also putting some of the responsibility to comply with this new tax on business that use plastic packaging. If you are a business that buys plastic packaging on which the tax should have already been paid, you may need to check that this is being properly accounted for to avoid the possibility of being held liable for any unpaid tax yourself.
For more information:
The government has published Getting Your Business Ready for the plastic packaging tax, and Further information for businesses.
Both pieces of guidance are regularly updated. They can both be accessed here: