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Plastic packaging tax is due to be introduced on the 1st April 2022 and is one of a few tax changes which could significantly impact food manufacturers and their finances. The plastic packaging tax is designed to encourage more manufacturers and businesses to start using recycled plastics.

Who is likely to be affected?

Manufacturers of plastic packaging in the UK, plastic packaging importers, consumers who purchase plastic packaging/products that come in plastic and customers of importers and manufacturers of plastic packaging will all be affected by the 2022 plastic tax.

What are the measures that will be put in place?

The new tax will apply to plastic packaging which is imported into the United Kingdom or manufactured in the UK which doesn’t contain at least 30% recycled plastic. Plastic packaging is recognised as packaging that is mostly plastic based on its weight.

The tax will not apply to packaging which is not mostly plastic by weight or contains 30% or more recycled plastic. Imported plastic packaging will also be liable to the plastic packaging tax, whether it is filled or unfilled.

Plastic packaging tax is payable at a rate of £200 per tonne by the importer or manufacturer. The threshold for plastic packaging tax registration is 10 tonnes in a 12-month period. The weight of exempt plastic and recycled plastic both count towards the plastic packaging tax threshold even though the tax is not payable on them.

Plastic packaging tax objective

The aim of the plastic tax is to issue a clear incentive for businesses to use recycled plastic in the manufacturing of plastic packaging. This will then generate a greater demand for recycled plastic material.

The increased demand for recycled plastic will push increased levels of plastic recycling and plastic waste collection, preventing it from ending up in landfill or being incinerated.

What does plastic packaging tax cover?

The key plastic packaging that is attracting plastic tax include the following:

  • Plastic packaging designed to be used in the supply chain
  • Plastic packaging which primary use is for storage
  • Plastic packaging designed to be single use by the consumer
  • Plastic packaging to be reused for presentation
  • Plastic packaging which is an integral part of the goods

It is important that you know whether plastic packaging that is imported or manufactured will fall into the definition of plastic for the purpose of the new tax. Plastic packaging parts are individually subject to the tax. For example, plastic bottles, labels and caps which are manufactured separately before being combined are still subject to the plastic packaging tax.

Please see below the current link to the HMRC plastic packaging tax guidance:

Registration

Plastic packaging tax is mandatory for all importers and manufacturers who use more than 10 tonnes of packaging per year, even if the plastic used contains more than 30% recycled plastic or exempt plastic. Even if no tax is due, businesses must still comply with record keeping requirements.

The plastic packaging tax comes into effect on the 1st April 2022 and HMRC must be notified of your business’ liability to register no later than the 30th April 2022. Plastic packaging tax returns are required on a quarterly basis, covering the following:

  • 1 April – 30 June
  • 1 July – 30 September
  • 1 October – 31 December
  • 1 January – 31 March

Please see the links below for the HMRC guidance on how to register for the plastic packaging tax and how to complete your plastic packaging tax return: