On 4 October 2021, the United Kingdom (UK) tax authorities, Her Majesty’s Revenue and Customs (HMRC) issued updated Guidance for businesses about how they should prepare for complying with the new Plastic Packaging Tax.
This new tax, which will take effect from 1 April 2022, will apply to plastic packaging manufactured in, or imported into the UK, that does not contain at least 30% recycled plastic. Plastic packaging is packaging that is predominantly plastic by weight. The rate of the tax will be £200 per metric tonne of plastic packaging.
It will not apply to any plastic packaging which contains at least 30% recycled plastic, or any packaging which is not predominantly plastic by weight.
Imported plastic packaging will be liable to the tax, whether the packaging is unfilled or filled.
Who is likely to be affected
This new measure will affect UK manufacturers of plastic packaging, importers of plastic packaging, business customers of manufacturers and importers of plastic packaging, and consumers who buy plastic packaging or goods in plastic packaging in the UK. Please note there will be an exemption for manufacturers and importers of less than 10 tonnes of plastic packaging per year.
The aim of the tax is to provide a clear economic incentive for businesses to use recycled plastic in the manufacture of plastic packaging, which will create greater demand for this material. In turn this will stimulate increased levels of recycling and collection of plastic waste, diverting it away from landfill or incineration.