Further Guidance Provided on the Plastic Packaging Tax
The Plastic Packaging Tax is due to come into force in the UK from 1 April 2022 and will see tax put on any packaging that contains under 30% of chemically or mechanically recycled plastic.
The HMRC has released further guidance on what this will mean for businesses, including what is liable for the tax.
Who will the Tax Effect?
Any business which manufactures or imports plastic packaging within the UK, at a rate of 10 or more tonnes per 12 month period must register for the PPT tax. This includes businesses that meet the 30% recyclable plastic benchmark as well as those who are exempt for other reasons.
Bioplastics, biodegradable, compostable and oxo-degradable plastics are included in the tax, so manufacturers of these materials must also register.
The report from the HMRC provides further details on this, with additional guidance on how soon this is set to be released. The deadline to register will be 30th April 2022.
What may come as a surprise is that the PPT tax will also be applied to those who are manufacturing packaging which contains multiple materials, when the larger percentage of the packaging is made from plastic. Under these circumstances, the entire product will be weighed as plastic.
When is the Tax Applicable?
The tax is liable to packaging products that are either manufactured within or imported to the UK – it will be charged £200 per metric tonne.
The packaging that is liable will be finished products that have ‘undergone its last substantial modification’, including extrusion, moulding or forming or which received its ‘last substantial modification before the packing or filling process’.
This means that businesses who pack and fill will only be liable if they undertake ‘substantial modification before the packing or filling process’.
Which Products are Subject?
The guidance released describes the packaging products that are liable as those that are ”designed to be suitable for use, whether alone or in combination with other products, in the containment, protection, handling, delivery or presentation of goods at any stage in the supply chain of the goods, from the producer of the goods to the consumer or user”.
To put it simply, this includes things such as plastic trays, films, reusable crates and carrier bags, but it also covers any single-use consumer packaging.
Those that are exempt will be classed into one of three categories…
- Products where the packing is not the primary aim of the product but is needed to store goods – such as first aid boxes.
- Packaging that is essential to the product, such as inhalers and deodorisers.
- Those where packaging is used for presenting products and are re-used, such as shop fittings.
Also exempt is packing used to transport imported goods, stores for aircraft, ships and rail, as well as medical product packaging and multi-use packaging where another permanent use is present.
