From April 1, 2022, the UK begins to impose a new tax - Plastic Packaging Tax - on recycled plastic packaging of less than 30% at a rate of £200 per tonne. This will affect many businesses and ultimately increase the cost to consumers.
1. If you cannot prove 30% you must pay tax
The UK is officially introducing the above policy at the end of November 2021 and this tax applies to sellers, both UK and non-UK, who produce or import certain plastic packaging materials. HM Revenue & Customs (HMRC) has taken the position that if you cannot demonstrate compliance with the 30% recycled plastic requirement, the company must pay the tax.
But many businesses that are required to pay the tax are either completely unaware of it or have difficulty understanding how it will work. A recent survey shows that in less than a month, as many as 80% of those who may need to register are not yet ready to file their tax returns.
Any company that is unsure if they must pay the tax should go online and read the extensive "Plastic Packaging Tax" guide available.
As early as January 1, 2021, the European Union has begun to impose a "plastic packaging tax", the specific measures: disposable plastic packaging at a tax rate of 0.8 euros per kilogram (equivalent to 5.58 yuan).
2. ultimately increasing the cost to consumers
The tax is not nearly enough," said Doherty, managing director of Re-Gen Waste. It won't have much of an impact on buyers' decisions. The price of plastic pellets fluctuates by well over £200 per tonne. Companies will obviously try to pass the cost on to their customers, who in turn will pass it on to consumers.
"Many packaging manufacturers and importers must pay £200 per tonne for plastic packaging, which will translate into a small increase in the price of products on the shelf. But some businesses may struggle to pass this cost on to retailers and for many there are costs associated with managing the tax as well as paying the actual tax."
3. The main content of the plastic packaging tax
a) Tax rate of £200/tonne for less than 30% recycled plastic packaging
b) Tax exemption for less than 10 tons of plastic packaging produced and/or imported within a 12-month period
c) Determine the types of products that are taxable and those that can be recycled to determine their tax coverage
d) Exemptions for producers and importers of small quantities of plastic packaging
e) Who is liable for the tax and needs to be registered with HMRC
4. What are the circumstances of tax exemption?
a) Has a recycled plastic content of 30% or more
b) Made from a variety of materials, with plastic not being the heaviest by weight
c) Produced or imported for direct packaging of licensed human drugs
d) used as transport packaging to import products into the UK
e) in aircraft, ships or rail stores used for international travel but not released into the UK
f) for the care of farmers, silage packaging is no longer covered by the levy
5. Who is responsible for paying the tax?
UK manufacturers of plastic packaging, importers of plastic packaging, commercial customers of plastic packaging manufacturers and importers, and consumers who buy plastic packaging goods in the UK.
A small number of producers and importers of plastic packaging will receive tax exemptions to reduce the administrative burden that is disproportionate compared to the amount of tax due.
6. Which packaging would be considered plastic
a) Plastics are polymeric materials to which additives or substances may have been added.
b) Cellulose-based polymers that have not been chemically modified (e.g. viscose fibers) will not be considered plastic for packaging tax purposes.
c) Other cellulose-based materials that have been chemically modified, such as cellulose acetate, will be considered plastic.
d) Additives include materials such as calcium or dyes. When you assess the plastic content of a packaging component, additives are classified as part of the plastic.
Plastics include the following polymers: biodegradable, compostable, oxidatively degradable
If a plastic packaging component is made of more than one material, but contains more plastic by weight than any other substance (including additives that form part of the plastic), it will be classified as a plastic packaging component for tax purposes.
