Bio-based Energy & Materials has learned that HM Revenue & Customs has announced that from April 1, 2022, a plastic packaging tax (PPT) of £200 per tonne (approximately RMB 1,700 per tonne) will be imposed on plastic packaging manufactured or imported into the UK in quantities greater than 10 tonnes per year, with less than 30% of recycled plastic used. If 30% or more of recycled plastic is used, no tax is payable. This primary legislation has become law and forms part 2 of the Finance Act 2021.
Among the key definitions in the plastic packaging tax, plastics include bioplastics, including biodegradable, compostable and oxidatively degradable plastics.
The UK has regulations on whether packaging is used for this tax. Among them, disposable plastic packaging even if the consumer needs to buy and use, but also subject to the plastic packaging tax.
In the case of composite packaging, if the plastic is the highest percentage of the packaging species used, all of it is considered plastic packaging and requires a plastic packaging tax. If not, the tax will not be levied.
Several key points：
（1） taxation: less than 30% of recycled plastic packaging
（2） tax-exempt: equal to or greater than 30% of recycled plastic packaging
（3）tax exemptions not limited by recycled plastic content: 1, where the packaging function is secondary to the storage function 2, the packaging is an integral part of the goods 3, mainly designed to display goods
（4）Plastics: Plastics include bioplastics, including biodegradable, compostable and oxidatively degradable plastics
（5）disposable consumer packaging (subject to payment): plastic bags including: shopping bags, trash can liners and garbage bags, sandwich bags, diaper bags; disposable cups including: expanded polystyrene cups, vending machine cups, plastic wine or pint glasses, party cups
（6）Recycled Plastics: Recycled plastics are plastics that have been reprocessed from recycled materials through the use of chemical or manufacturing processes so that it can be used for its original purpose or for other purposes. This does not include organic recycling
（7）4 categories of products exempt from tax under the law (exemption): 1, used as transport packaging for export goods. 2, used in aircraft, ships and rail cargo stores. 3, used for direct packaging of pharmaceutical products. 4, permanently designated or set aside for uses other than packaging purposes.
How will the tax work?
The tax may apply to finished plastic packaging manufactured in the UK or imported into the UK, whether the plastic used has a recycling rate of less than 30% (by weight). In the case of plastics with a recycling rate of less than 30%, the tax rate payable is £200 per metric tonne, payable by the manufacturer/importer.
From the moment a company imports or manufactures 10 tons or more of plastic packaging, it is obligated to register the PPT and keep records of it. Registration may be required even if the company is not subject to tax (depending on whether it is below the 30% recycled content threshold).
Will your business be affected?
If you sell and/or manufacture goods that use a lot of plastic packaging on their way to the consumer, it is likely that your business will be affected by the new tax. For cross-border sellers, even if you are a multinational company that does not manufacture in the UK, you may be subject to/registered for the tax whenever you bring packaged goods into the UK.
All businesses that manufacture or import plastic packaging are required to keep records of the packaging they manufacture or import so that businesses can prove to HMRC whether they need to register for the tax themselves.
The PPT will take effect on 1 April 2022 and the HMRC portal for registering and paying for the PPT is expected to be available on 1 April 2022, the effective date of the tax.
