Plastic Packaging Tax

Are you ready for the Plastic Packaging Tax (PPT)?

The 1st of April 2022 is an important date in the diary – the Plastic Packaging Tax (PPT) begins. Businesses need to prepare in advance for this new announcement by the UK government to ensure they’re compliant and following the correct measures. Here’s everything you need to know about the impending Plastic Packaging Tax.

What is the Plastic Packaging Tax?

A call was made in the 2017 budget to address single-use plastic waste and its effect on the environment. Over the past five years, the wheels have been in motion to create Plastic Packaging Tax, also known as PPT. The 2018 budget saw the introduction of  PPT on any plastic packaging with less than 30% recycled plastic.

Set at £200 a tonne, it’s a positive step to encourage manufacturers of packaging to utilise more recycled materials. This will result in less ending up in landfills and instead re-used. Not only will this apply to packaging made in the UK but any imported will also need to adhere to the 30% minimum rule. Regardless of whether a business meets the required threshold or not, they will still have to register for PPT. The UK government’s new law will hopefully stimulate plastic packaging production through the process of sourcing plastic waste, increase recycling further and turn the attention away from incineration.

A new system to track, develop and monitor PPT by HRMC will cost in the region of £10-20 million pounds. In addition, funds rising to £22m for additional resources, costs and putting the staff in place to ensure a smooth transition for businesses of all sizes.

Which Packaging is Subject to the Tax?

There are certain criteria in place which will apply to PPT. It will include all polymer materials where additives are introduced but not any cellulose-based polymers which have not been chemically modified. Although plastics can also contain other materials such as steel, aluminium or glass, essentially the weight of the plastic packaging containment needs to contain more weight from plastic than any other substance. Records need to be kept to ensure you follow the correct protocol. You can find out more information about which plastic is subject to plastic packaging here. There are a few exemptions to the rule, which include:

• Packaging used as ships, rail stores and aircraft
• Permanently set aside or designated for something other than packaging use but still classed as a plastic component
• Packaging used for a medicinal product
• Imported goods that use transport packaging

Does Your Business Need to Register?

To make sure your business (early estimates suggest it will impact 20,000 importers and manufacturers of plastic packaging) is above board and operating in a sufficient legal manner, it’s imperative to do due diligence and register ready for the new PPT on the 1st of April 2022. It doesn’t matter if you’re in consumer goods, food and drinks, packaging manufacturing or online retail. It will apply to multiple businesses that produce or import plastic packaging. Better to be safe than sorry! Any business that acts as the last stage of the manufacturing process before that package is filled or packed is liable from a tax standpoint. Check here whether you need to register.

Whether you’re registering a single business or a group of businesses, this is an important step for the future of our planet. It will incur additional costs for your business such as registration costs with the HMRC, filing tax returns and training staff about the new tax legislation but the positives far outweigh the negatives.

If you need more information on Plastic Packaging Tax (PPT), get in touch here.