Plastic Packaging Tax – Latest News

• United Kingdom

• Environment
• Consumer
• Industrials - Chemicals

24-11-2020

Despite the pressures of COVID the government is pressing on with many of its environmental initiatives including its world leading plastic packaging tax. In mid-November HMRC published its responses to the recent consultation on the design of the plastic packaging tax. Draft primary legislation was published at the same time and we expect secondary legislation and guidance to be published later this year.

Key points to note are:

• the tax will apply from 1 April 2022;
• it will apply to finished plastic packaging produced in the UK or imported into the UK that contains less than 30% of recycled plastic;
• it applies to both filled and unfilled packaging;
• small producers (those manufacturing or importing less than 10 tonnes of plastic packaging) will be exempt;
• the tax will be charged at the rate of £200 per tonne;
• for UK manufactured packaging the tax charge will be made at the final stage of conversion after ancillary processing but before the packaging is packed or filled;
• for imported packaging the person on whose behalf the packaging is imported will be liable; and
• transport packaging will be excluded from the tax.

Industry should be aware that there are circumstances where one company can be held responsible for a breach of this legislation by another company e.g. 

• if a person knew or had reasonable grounds to believe that tax has not been accounted for and/or
• all members of a corporate group will be liable for the tax.

There will be penalties for breaches such as late registration, late filing, late payment, failure to provide information, failure to keep records and incorrect notifications.

The government acknowledged the need for further clarification and guidance in some areas. With little over 12 months to prepare now is an opportune time for businesses to review their packaging and to consider whether there are opportunities to remove/reduce plastic packaging or as a minimum to discuss with their suppliers whether the recycled content can be increased.