Introducing: The Plastic Packaging Tax
The Plastic Packaging Tax asserts that manufacturers and importers of substantial amounts of plastic packaging in the UK must pay a tax on it. The tax will be charged at £200 per ton and will come into force on the 1st of April 2022.
With at least 14 million tonnes of plastic ending up in our oceans, plastic waste is one of our planet's greatest challenges today. The plastic packaging tax comes at a time when there is a growing sense that more must be done to tackle the plastic crisis, and there is a lot more that can be done.
Who does the tax apply to?
The Plastic Packaging Tax applies to those that have manufactured or imported ten or more tonnes of finished plastic packaging components within the last 12 months or will do so in the next 30 days, and will only apply to plastic packaging components that contain less than 30% recycled plastic. The Government estimates that the tax will affect up to 20,000 packaging manufacturers and importers. The two following questions can be answered to determine whether a business qualifies:
1. Has the business manufactured or imported 10 tonnes of plastic packaging or more over the last 12 months?
If the answer is yes, it will be liable from the first day of the month and will have 30 days to register for the tax. The first year will work differently as manufacturers and importers will only need to look back as far as the 1st of April 2022 start date.
2. Will the business manufacture or import 10 tonnes or more of plastic packaging in the next 30 days?
If the answer is yes, it will be liable from the date it had reason to expect it would reach the threshold and will have 30 days to register from this date.
Penalties
Late submissions or payments can lead to penalties, as well as interest on late payments. Misstatements and non-compliance can lead to a fine of £20,000, or three times your total Plastic Packaging Tax liability, as well as a prison sentence.
What kinds of plastic packaging manufactured or imported by the reporting company are included in the Plastic Packaging Tax?
Plastic packaging designed to be used in the supply chain e.g., packaging used for the containment, protection, handling, delivery, or presentation of goods.
Plastic packaging that is designed to be single use by the consumer
Exclusions:
Plastic packaging which is an integral part of the goods;
Plastic packaging where the primary use is for storage;
Plastic packaging to be reused for presentation
Transport packaging that meets specific exemption requirements
Impact
The tax will provide a clear economic incentive for businesses to use recycled plastic in manufacturing plastic packaging or even to find alternative packaging materials. The UK Government hopes that the tax will stimulate demand for recycled plastic which will, in turn, increase the amount of recycling and collection of plastic waste, saving it from landfills or incineration. The UK Government estimates that recycled plastic in packaging could increase by 40% because of the plastic packaging tax, equal to carbon savings of nearly 200,000 tonnes in the first year of implementation, based on current carbon factors.
The UK Plastic Packaging Tax is a step in the right direction for tackling the plastic crisis and signals tighter taxes and restrictions around plastic in years to come. Businesses should begin preparing themselves as soon as possible.
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Sources:
https://www.iucn.org/resources/issues-briefs/marine-plastic-pollution
https://www.gov.uk/guidance/when-you-must-register-for-plastic-packaging-tax
https://www.legislation.gov.uk/uksi/2022/117/contents/made
https://www.legislation.gov.uk/ukpga/2021/26/part/2/enacted
https://www.gov.uk/guidance/work-out-which-packaging-is-subject-to-plastic-packaging-tax#supplychain