What is it?
This is a new tax brought in by the UK government and is effective from the beginning of April 2022. This is being introduced to encourage the use of recycled materials in plastic packaging.
From the 1st of April any plastic packaging material that contains less than 30% recycled material, that has been either imported into or manufactured in the UK, will have the tax applied.
Who is liable for the tax?
This lies with one of two parties which is dependent on the origin of the packaging.
- For items manufactured in the UK, the manufacturer of the finished packaging component item will be liable for the tax.
- For items that are imported, the business who takes ownership first when it arrives in the UK will be liable for the tax.
How much is the tax?
For items manufactured in the UK or imported, that contain less than 30% recycled material, the tax applied equates to £200 per tonne or 20p per kilo.
Exemptions to the new tax
There are exemptions to the new UK plastic packaging tax which are
- Packaging used for human medicines
- Transit packaging for example shrink wrap around imported materials
The financial impact of this new tax is dependent on whether the business is a direct or indirect taxpayer
Direct Taxpayers are the businesses which either manufacture or import the packing components.
Direct taxpaying business will have to report to HMRC on a quarterly basis the following:
Total weight of imported or manufactured packaging
The proportion of packaging that exceeds the 30% recycled content
The proportion of packaging that qualifies for exemption
The proportion of packaging exported
Indirect Taxpayers these are the businesses that purchase the packaging. As they do not manufacture or import the packaging, they are not liable for the tax. However, they are likely to see the cost of the packaging increased to offset the tax payable on packaging manufactured/imported containing less than 30% recycled material.