SUSTAINABILITY PROJECT NEW
PACKAGING SUSTAINABILITY LEGISLATION:
WHAT CAN BUILDERS MERCHANTS EXPECT?
There are some pressing questions faced by merchants and Suppliers as new and ongoing packaging sustainability legislation impacts the building products sector.
National Buying Group commissioned a recycling expert to explore what these changes will mean for merchants of building supplies and the steps they can take to mitigate the potential for added costs ahead of time. Here are some of the most urgent questions.
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What does the Plastic Packaging Tax (PPT) mean for your business? The PPT was rolled out in April 2022 and contains complex rules and regulations that need to be understood and implemented by builders’ merchants, both in terms of the packaging provided by manufacturers up the supply chain and how merchants process and use that packaging for their own products.
Who is liable to pay the PPT? Unfortunately, the answer to that question is not quite so obvious. Put simply, the PPT applies only to merchants that use plastic packaging components with less than 30% recycled content. Plastic packaging containing 30% or more of recycled plastic will not be liable for the tax.
Liable businesses will be required to submit quarterly returns to HMRC detailing how much liable packaging they have handled for
22
he government has begun implementing important legislation for businesses, aimed at reducing plastic packaging dependency.
the period and pay the associated tax. The chargeable rate for any plastic packaging component containing less than 30% recycled content stands at £200 per metric tonne. Businesses manufacturing or importing more than 10 tonnes of plastic packaging components within 12 months of the start date, are required to pay the tax, however, liability is classed as ‘Joint & Several’. It’s important to note that while liability can fall with a single business, ‘several and joint liability’ makes the entire supply chain responsible for ensuring PPT has been paid. It enables HMRC to collect the tax from parties other than the first obligated business if they are unable to collect from the first liable party going up the supply chain.
In the supply chain, the business deemed to have the greatest influence on the packaging they put on the market will face the greatest PPT cost. Plastic packaging suppliers and merchants that pack products in their own branded packaging risk the greatest financial burden, as they will be, for PPT purposes at least, considered as packaging manufacturers.
What steps should I take to get ahead of this?
For merchants unsure about which of their plastic packaging components falls under the PPT, best practice is to carry out a plastic packaging audit to help determine where
liability lies — with merchant or suppliers. A plastic packaging audit offers merchants the opportunity to identify where changes can be made that will deliver a reduction in their PPT liability.
Bob Fleetwood of Kellaway Building Supplies, who is leading NBG’s plastics reduction team along with Jasmine King from NBG’s Central Team, carried out a revealing packaging audit at Kellaway. The audit looked at everything from hand tools to roofing felt, insulation and timber along with all packaging types from branded packaging to bubble wrap, stretch and shrink wrap. We now need to understand why manufacturers of building products use plastic packaging, what alternatives can be put in place, such as recycled plastic packaging and, perhaps most importantly, where it can be eliminated altogether with no impact on product quality, transportation or merchant yard safety.
Can suppliers play their part in helping these efforts? Without doubt, now is the time to accelerate the process of talking to our suppliers about the feasibility of changing how they use plastic, without impacting product quality or safety during transportation. To help mitigate financial burden, merchants should exercise due diligence by gathering
January 2023
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