Tomorrow (1 April) the Plastic Packaging Tax will start to be levied against the vast majority of plastic packaging which is produced in, or is imported into, the UK.
In broad terms the tax applies to plastic packaging in which less than 30% of the plastic is recycled plastic. The tax is paid by the organisation in the supply chain which undertakes the last "substantial modification" before the packing or filling process. The rate payable is £200 per tonne.
This tax is going to have an impact in a number of sectors, including retail (importing products such as drinks bottles, carrier bags and sandwich bags), manufacturers and importers of plastic components, publishers importing plastic for laminating books or wrapping magazines, transport providers who import plastic such as bubble wrap and pallet wrap and fresh food producers who import plastic packaging to seal their products.
Although this has been trailed for many years (and was announced in the Budget 2018), research by Veolia found that 77% of British retails and manufacturing businesses remain unaware of it. If caught, the initial timescales are short.
Organisations that manufacture or import plastic packaging in quantities of more than 10 tonnes per annum need to register with HMRC via their online portal within 30 days of the date they become liable - for some that will be within 30 days of 1 April.
Going forward, there will be a number of steps organisations will need to consider, including:
- keeping records, even if all the packaging that they manufacture or import contains more than 30% recycled plastic;
- seeking to future-proof their supply chain, for example by opting for packaging made of over 30% recycled plastic;
- embedding due diligence checks within their compliance framework to ensure it is clear who, in the supply chain, is primarily liable for the payment of PPT;
- reviewing contracts to determine which party will take on the cost of PPT and to allocate liability in the event of non-compliance.
There are also anti-fragmentation measures that prevent entities from artificially separating their businesses in order to fall under the 10 tonne per year registration threshold and avoid paying the PPT.
Research by Veolia has found that 77 per cent of British retail and manufacturing businesses remain unaware of the Plastic Packaging Tax, which will be implemented this Friday (1 April). The tax will see a £200 per tonne levy placed on producers or importers of relevant plastic packaging that fails to include at least 30 per cent recycled content.