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Plastic Packaging Tax Consultation 2020

  • United Kingdom
  • Environment
  • Tax planning and consultancy - Budget
  • Industrials

13-03-2020

Those in the diversified industrials sector will have seen that the Chancellor announced in the recent budget that the government is going ahead with its plans to introduce a world leading plastic packaging tax. The tax will be set at a flat rate of £200 per tonne of plastic packaging with less than 30% recycled content.

Concurrently HM Revenue and Customs launched a consultation on the design of the tax which is open for responses until 20 May 2020.

The aim of the tax is to encourage the use of recycled plastic. The tax should help to create a demand for recycled plastic which will stimulate increased collection and recycling of plastic waste.

This is the first in a number of measures which are on the cards to tackle the issue of plastic waste. It should also be viewed in the context of planned changes to the packaging waste regime which are also scheduled to be consulted on later this year.

What does the tax apply to?

  • Plastic packaging manufactured in the UK
  • Plastic packaging imported into the UK (both filled and unfilled)

The tax will apply to packaging made of multiple materials where the greatest single material by weight is plastic.

There is a proposed exemption for small businesses ie those that manufacture/import less than 10 tonnes of plastic packaging in any 12 month period.

Who pays the tax?

Where plastic packaging is manufactured in the UK, the manufacturer will pay the tax.

Where plastic packaging is imported into the UK then the tax is payable by the person on whose behalf the plastic packaging is first commercially exploited.

The burden of proof will be on the manufacturer/commercial exploiter to show that the plastic packaging contains a 30% recycled content.

Affected persons will need to register with HMRC.  Group registration is possible with a single tax return to be filed by a representative member.

Consultation

The consultation includes a number of areas including:

  • the definition of plastic
  • the treatment of products such as cling film where the packaging function does not appear until the product is used by a customer
  • the treatment of transport packaging and packaging used on medicines
  • how the expression “first commercially exploited” is interpreted
  • joint and several liability
  • the de minimis

For those wishing to respond the link is below

https://www.gov.uk/government/publications/introduction-of-plastic-packaging-tax/plastic-packaging-tax

Jane Southworth, Partner
Colin Askew, Partner

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