What is the Plastic Packaging Tax?
5 million tonnes of plastic are used in the United Kingdom each year, it is also thought that at least half of the plastic used is for packaging.
Only a small amount of the plastic used in the United Kingdom is recycled meaning that plastic waste is either exported or sent to landfill.
On the 1st April 2022 UK HMRC introduced the Plastic Packaging Tax to try and tackle this issue.
This mean that products that use plastic packaging and don’t contain at least 30% recycled content will be subject to plastic packaging tax at a rate of £200 per metric tonne of plastic used in the packaging.
What do you need to report?
A business that has contributed 10 tonnes of plastic packaging or more onto the UK market within the last 12 months will need to register with HMRC and report this.
You should also register if you have reasonable grounds to believe that you will exceed 10 tonnes within the next 30 days.
Important to note: HMRC advise that even if you don’t reach the 10-tonne threshold you should keep records to demonstrate this.
It is necessary to keep track of the following to remain in line with this new tax.
- Total weight and breakdown by weight of all materials used to manufacture plastic packaging, this excludes any packaging which is used to import goods.
- All data and calculations which determine whether packaging is most part plastic and the percentage of recycled plastic it contains.
- The weight behind all exempt plastic packaging and reasoning as for why it is exempt.
- The amount in weight of plastic packaging exported and the allowed relief from the tax.
What can I do to avoid issues?
The introduction of plastic packaging tax also provides the opportunity to improve the long-term sustainability of your packaging.
If you are not directly paying the tax it is important to ensure that the price of your packaging does not become unsustainable.
Communication with your packaging supplier regarding alternative products and recycled equivalents will help prevent any future price increases.
How can Signature Tax help?
If you are switching to sustainable packaging such as ocean plastics, or use sustainable packing already, then you may be eligible for significant tax relief.
If you would like to explore this please call 0333 009 0801 for more information. You can also email us at firstname.lastname@example.org.