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Plastic Packaging Tax to be introduced from April 2022


of small quantities of plastic packaging,


With a new plastic packaging tax looming, BIFA recommends that Members prepare by liaising with packaging suppliers at an early stage


The UK government published proposals on 3 March 2021 for a Plastic Packaging Tax which will affect UK manufacturers of plastic packaging, business customers of manufacturers and producers of plastic packaging, as well as consumers who buy plastic packaging or goods in plastic packaging in the UK.


It is a wide-ranging proposal affecting almost everyone in the country, and whilst it does affect forwarders in their day-to-day import activities as significant users of plastic product, it also has the potential to impact their overheads. All manufacturers/importers of less than 10 tonnes of plastic packaging per annum are exempted from the scheme.


The tax will not apply to any plastic packaging that contains at least 30% recycled packaging or any packaging that is not predominantly plastic by weight.


Imported plastic packaging will be liable to the 14


tax, whether the packaging is unfilled or filled. The aim is to provide an economic incentive to businesses to use recycled material in the manufacture of plastic packaging. At the same time, it is hoped that it will encourage increased levels of recycling, diverting waste away from landfill or incineration.


Key features


The 2021 Finance Bill includes the provision to introduce legislation to establish a Plastic Packaging Tax, including the key features that include: • The £200 per tonne tax rate for packaging with less than 30% recycled plastic,


• A registration threshold of 10 tonnes of plastic packaging manufactured in or imported into the UK per annum,


• Scope of the tax by definition of the type of taxable product and recycled content,


• An exemption for manufacturers and importers


• Identification of who will be liable to pay the tax and need to register with HMRC,


• How the tax will be collected, recovered and enforced,


• How the tax will be relieved on exports. Pre-packed goods


It is important to note that the tax applies to goods pre-packed in plastic for shipment and eventual retail sale. The government and HMRC estimate that this


measure will generate carbon savings of nearly 200,000 tonnes in 2022 to 2023, based upon current carbon factors. It is envisaged that the use of recycled plastic in packaging will increase by approximately 40% per annum which will, in turn, encourage recycling industries within the UK. Although a little way off, BIFA would suggest that contact is made with packaging suppliers to establish whether they are aware of these developments, and what steps they are taking to mitigate the likely cost impacts. Looking at current consultations, this is likely to be only one of many initiatives backed by legislation to drive changes intended to support environmental improvement.


July 2021


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