Plastic Packaging Tax
Latest update on HMRC plastic packaging Tax
On Thursday 28th May the HMRC hosted a webinar for the new plastic packaging tax, which has been confirmed by the Chancellor of the Exchequer Rishi Sunak, to start in April 2022.
The first consultation was launched last year which received over 400 responses, with a second launched on the 11th March 2020. This has had its consultation period extended to 20th August 2020, due to the COVID-19 crisis, to allow for a wide range of responses.
Despite common perceptions, the government does not introduce new taxes very often, so it is good to be on the front foot with this one. The plastic packaging tax is being put into place to encourage the use of recycled plastic by stimulating end markets and providing economic incentives. All of this of course helps to reduce the amount of packaging that ends up in landfill each year.
The hope is to encourage a long-term change to packaging design by companies who can most influence the recycled content in the packs they specify and produce. It is thought that the future tax revenue will benefit investment into recycling sustainability and waste management, much like the Producer Responsibility Packaging Waste Regulations.
The tax targets companies in the UK that either; manufacturer plastic packaging, import plastic packaging, import filled plastic packaging, where the plastic packaging on a per component basis contains less than 30% recycled content. In relation to the per component basis, a drinks bottle provides a good illustration of this consisting of a bottle, a label and a lid (i.e. 3 separate components)
UK Manufacturers and importers of plastic packaging who meet the de-minimis which will be set at more than 10 tonnes per annum, will be required to comply through registration with HMRC and pay the tax due via quarterly tax returns. This sets a clear economic benefit to using plastic packaging with an increased recycled content, as having 30% or less recycled content will be taxed as £200 a tonne under the new rules.
HMRC will have the power to check tonnages with other environmental bodies, for example, data submitted to the Environment Agency for the Producer Responsibility Packaging Waste obligations and enforcement action would be taken for non-compliance.
A lot of the finer details are still to be confirmed after this consultation period regarding exports and transport packaging rules. We will keep you updated but HMRC encourage further engagement from all stakeholders and ask you to review the consultation found here: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/871559/Plastic_Packaging_Tax_-_Consultation.pdf
You can respond using their template via e-mail by 20th August to firstname.lastname@example.org