Government has proposed draft legislation for Plastic Packaging Tax

The government has proposed a draft legislation to introduce a Plastic Packaging Tax, which would take effect from April 2022. The aim of the tax is to provide businesses with an economic incentive to start using recycled material when manufacturing plastic packaging. The tax will increase levels of recycling and plastic waste collection by increasing demand for recycled materials, in turn diverting it away from incineration and landfills.

The tax applies to plastic packaging, which is produced or imported into the UK, that contains less than 30% recycled plastic. Plastic packaging is defined as packaging that is predominantly plastic by weight. The tax will not apply if the plastic packaging is at least 30% recycled plastic however, it will apply to imported plastic packaging whether the packaging is filled or unfilled.

The legislation will be introduced to create the Plastic Packaging Tax. The government is publishing a primary draft of the legislation which sets out the key features of these proposed revisions, including:

  • Packaging with less than 30% recycled plastic to pay a tax rate of £200 per tonne
  • Registration threshold of 10 tonnes of plastic packaging imported into the UK or produced in the UK per year
  • Exemption for importers and producers of small quantities of plastic packaging
  • Who will be liable to pay tax and need to register with HMRC
  • How the tax will be collected
  • How the tax will be enforced
  • How the tax will be relieved on exports

Who is likely to be affected

  • UK producers of plastic packaging
  • Importers of plastic packaging
  • Producers and importers business customers
  • Consumers of goods in plastic packaging within the UK

There is expected to be very little impact on consumers however, there could be minor increases in price if businesses decide to pass on the charge to their customers and increase their prices. This is expected to be a small increase as plastic packaging is usually only a very small amount of the total cost.

For further information visit the government website.