Getting ready for the plastic packaging tax ahead of 2022 – we explore the issues
The urgency of the climate change agenda continues to gather momentum and the UK is making strides in waste reduction and the improvement of recycling rates. Large businesses and governments around the world are responding to the burgeoning influence of activists such as Greta Thunberg and the impact of TV documentaries like Blue Planet II.
While consumers can take personal action to avoid single-use plastics, only businesses and brands are able to make decisions that affect the use of plastic across the entire supply chain.
The UK government is set to introduce a new tax on plastic packaging from April 2022 that will prompt producers and high-volume users to consider the alternatives or face a financial consequence.
There is no doubting the scale of the problem. The figures speak for themselves with 2.4m tonnes of plastic being produced and used in the UK annually.
According to WRAP, plastic packaging accounts for 70 per cent of plastic waste which led to the development of the UK Plastics Pact which brings together producers and policymakers to develop new ways to boost recycling and the use of recycled content.
At PDS, we are working closely with our clients and supply chain partners to help everyone prepare for the changes ahead to successfully reduce their exposure to the plastic tax and make a positive contribution to the environment. In this blog, we explore the key issues and provide some pointers.
What is the plastic tax?
From April 2022, producers and users of plastic packaging will need to ensure that it contains at least 30 per cent recycled content by weight. Only those that produce less than 10 tonnes each year will be exempt.
Any packaging that fails to comply becomes liable for a tax of £200 per tonne to be collected by HMRC. Exceptions include plastic packaging for medicines and imported goods as well as those in transit through the UK.
It is anticipated that manufacturers of plastic packaging will pass on their costs to businesses, spreading the load across multiple sectors. The government expects to raise around £240m in year one and forecasts that revenue from this levy will gradually decrease over time as providers find greener alternatives.
The predicted impact of the plastic tax is that 75 per cent of packaging will contain more than a third of recycled content by 2021 (an increase of 50 per cent on 2017 levels). If the tax applies to your business you will need to register with HMRC and put in place processes to collect data, retain evidence and supply details as part of your business tax return.