The New Plastic Packaging Tax and How It Could Affect Your UK Business

Posted on May 31, 2022
Categorised as Freight industry news

On the 1st April 2022, a new Plastic Packaging Tax was implemented, in an effort to encourage UK businesses to utilise more recycled plastic packaging. This is the first of two Government initiatives to improve the green credentials of UK businesses, with the Extended Producer Responsibility regulation set to come into force in 2023.

Below, we explain what these new laws will mean for UK businesses, who they will apply to and how much you could be liable to pay.

What is the Plastic Packaging Tax?

The Plastic Packaging Tax, or PPT, applies to plastic packaging that is manufactured in or imported to the UK that consists of less than 30% recycled plastic. In the case of multi-material packaging, it will be classed as plastic if plastic makes up the majority by weight.

The aim of this tax is to cut plastic pollution and encourage the use of recycled materials.

Who Does the Plastic Packaging Tax Apply To?

The Plastic Packaging Tax will need to be paid by businesses that manufacture or import 10 or more tonnes of plastic packaging within a 12-month period, or if you expect to do so in the next 30 days. The Government estimates that around 20,000 businesses will be affected.

If your business does not manufacture or import 10 or more tonnes of plastic packaging per year, you will not have to pay the tax. However, all businesses will have to keep a record of their plastic packaging data, including evidence of why they are exempt from the tax. If at any point a business goes over the 10 tonne minimum of plastic packaging with the 12-month period, they must register to pay the tax with the HMRC.

How Much Does the Plastic Packaging Tax Cost?

The Plastic Packaging Tax is charged at £200 per tonne of plastic that is less than 30% recycled plastic.

What Plastic Packaging is Liable?

Examples of the type of packaging that is liable for the tax includes:

  • Single-use drinks bottles
  • Crisp packets
  • Film to protect produce
  • Labels designed to describe the contents of a product
  • Pallet wrap
  • Warehouse pick bins
  • Plant pots (sold with plants inside)
  • Ready meal trays
  • Tamper-proof seals
  • Reusable plastic crates, such as those used to transport fruits or baked goods

Examples of packaging that is exempt of the tax include:

  • Bags for life
  • Reusable drinks bottles
  • Home storage boxes
  • Plastic cutlery
  • Reusable coffee cups
  • Reusable medical sharps bins
  • Cable trunking
  • Light bulbs

Packaging that is an integral part of the goods (such as lighters and inhalers) or where the primary function is for storage (such as CD cases or toolboxes) are also not liable for the tax.

A full list of what comes under the scope of the Plastic Packaging Tax and what doesn’t can be found on the Government website.

What is the Extended Producer Responsibility for Packaging?

The Extended Producer Responsibility, or EPR, is another Government initiative aiming to reduce packaging pollution. It will result in companies that produce packaging bearing the cost for the treatment or disposal of post-consumer goods. This could include clearing litter, refuse collection, and recycling.

The Government is still setting out the details of the scheme, including the scope of the full net costs, regulation and governance of the scheme, and producer obligations.

It’s expected that all businesses that put packaging into the market will be expected to bear some of the responsibility, but with those with the most polluting materials paying a higher amount. This will include the brand owners, importers, distributors, sellers, and online marketplaces. Those that produce or import packaging that has higher recycled content or is more efficiently designed are expected to contribute less to the scheme.

How Should I Prepare for the Extended Producer Responsibility?

The EPR won’t be implemented until 2023 at the earliest, but there are some steps that businesses can take now to begin preparation. Like with the Plastic Packaging Tax, all businesses will need to keep records on their packaging data, so you should begin planning now to allow for these extra reporting requirements. You should also factor in the potential for additional costs related to your packaging. You could also start thinking about where you can make improvements with regards to packaging efficiency and recycled content and start implementing those changes now.

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