B


Business


New tax will hit UK businesses reliant on imports particularly hard


New t impo


W


ith just Packag


use of recycled p Andrew Thurston at MHA, argues th compliance, or ex


tax will hit orts particu


ith just a few weeks until the Plastic Packaging Tax (PPT) is introduced (1 April) in the UK to encourage the


use of recycled plastic in product packaging, Andrew Thurston, customs duty consultant at MHA, argues the process of proving


he process of proving


compliance, or exemption, to this new tax will be especially burdensome for businesses reliant on imports for pa


xemption, to this new tax will


be especially bur rdensome for businesses reliant on imports for packaging: “There are goo


ackaging:


“There are good intentions behind the Plastic Packaging Tax (PPT) but, while it should work well for UK busin packaging dome cumbersome adm that rely on impo


od intentions behind the Plastic


Packaging Tax (P PT) but while it should work well for UK businesses who source their plastic packaging domestically, it will create a very cumbersome administrative burden for those that rely on imports and could potentially prove self-defeating.


PT) but, while it should work esses who source their plastic stically, it will create a very ministrative burden for those orts and could potentially prove


“The tax is desi businesses to inc of single-use plas finished plastic p imported into, th 30% recycled. It m meticulously calc packaging plastic complaint.


p


“The administr acutely by those goods and packa the UK. To ensure exempt from PPT from their interna


recycled content the necessary evi and costly reques any attempts to c prohibitive. Ironic businesses ignori sustainable mate


“The tax is designed to encourage UK businesses to increase the recycled content of single-use plastic packaging. It will apply to finished plastic packaging manufactured in, or imported into, the UK if the plastic is less than 30% recycled. It means companies will need to meticulously calculate and report their recycled packaging plastic to ensure they remain tax


igned to encourage UK crease the recycled content stic packaging. It will apply to ackaging manufactured in, or he UK if the plastic is less than


p


means companies will need to culate and report their recycled c to ensure they remain tax


“The administrative burden will be felt most acutely by those businesses who purchase goods and packaging materials from outside the UK. To ensure they are compliant with, or exempt from PPT, they must obtain evidence from their international suppliers of the recycled content of packaging. Obtaining the necessary evidence could be a difficult and costly request, potentially rendering any attempts to claim tax exemption cost- prohibitive. Ironically, this could result in businesses ignoring the call to use more sustainable materials as meeting the


ative burden will be felt most businesses who purchase aging materials from outside e they are compliant with, or T, they must obtain evidence ational suppliers of the


t of packaging. Obtaining idence could be a difficult st, potentially rendering claim tax exemption cost- cally, this could result in ing the call to use more erials as meeting the





(1 Apri l) in the UK to encourage the plastic in product packaging, n,


t a few weeks until the Plastic ging Tax (PPT) is introduced


UK busine ularly hard


esses relian nt on


exemption-threshold might not be worth it financially, defeating the purpose of the tax. “In addition, any companies purchasing


“In addition, any companies purc goods from outside the UK will nee


e worth it of the tax. chasing


goods from outside the UK will need to review individual products for the weight of the plastic packaging to be able to accurately report quantities and account for PPT. This is a dauntingly long and complex process, especially as hundreds of different products enter the UK through today’s complex supply chains. The additional costs will ultimately be 


of the curately PPT. This process, products plex supply timately be


  ed to review


passed through t


passed through to the end consumer, resulting in increased retail prices.


o the end consumer, resulting l prices.


particular those w produce for retail


UK businesses wo new tax landscap


“All in all the PPT could prove a huge headache for certain kinds of business, in particular those who package goods and fresh produce for retail, such as supermarkets. More taxes designed to promote sustainability are also likely to be introduced in the near future. UK businesses would be wise to adapt to the new tax landscape as quickly as possible to ensure they are prepared.”


PT could prove a huge tain kinds of business, in


who package goods and fresh l, such as supermarkets. More o promote sustainability are ntroduced in the near future. ould be wise to adapt to the pe as quickly as possible to prepared.”


12


12


February 2022


www.convertermag.com


w.convertermag.com


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