From 1st April 2022 HMRC are introducing a new Plastic Packaging Tax to encourage businesses to use recycled plastics in their packaging. The rate of the tax will be £200 per metric tonne of plastic packaging.
The new tax will apply to plastic packaging that is less than 30% recycled that is:
Any business that manufactures or imports 10 or more tonnes of plastic packaging in a 12 month period will be required to register for the tax. Businesses manufacturing or importing under this volume will still need to keep records to demonstrate that it is below the tax threshold (and monitor in case the business becomes liable in the future).
Businesses should consider making changes to the packaging it manufactures or imports so that it includes at least 30% recycled plastic where possible. This would mean that no tax would be payable under these circumstances. Plastic packaging is assumed to not meet the recycled content test unless it can be shown that it does.
Actions to take:
It is expected that the Plastic Packaging Tax will affect a wide range of businesses, and as a new tax, subject to many conditions, regulations, exceptions and anomalies, will undoubtedly bring many challenges as well as opportunities.