Plastic Tax – Plastic Packaging Tax to be implemented on 1 April 2022

A new tax, known as the Plastic Packaging Tax (PPT), will come into effect from 1 April 2022.

If you were unaware of this new tax, you are not alone. A recent survey estimated that around 77% of British manufacturing and retail businesses remain unaware of the tax and their responsibilities. The research was carried out by YouGov, on behalf of waste firm Veolia.

Below we summarise how it may affect your business, who may ned to register for this tax, and what you will need to do.

What is the plastic tax?

PPT is a new tax that is to apply to plastic packaging, which is manufactured in, or is imported into the UK. It only applies to plastic packaging that does not contain at least 30% recycled plastic. the definition of plastic packaging is packaging that is predominantly plastic by its weight.

PPT will not apply to any plastic packaging containing 30% or more recycled plastic, or packaging which by weight, is not predominantly plastic.

Plastic packaging, which is imported will be liable to this tax, regardless of whether it is unfilled or filled.

How much is the plastic packaging tax?

The  tax will be charged at a rate of £200/per tonne.

Who needs to register for the plastic packaging tax?

Businesses are required to register for the Tax if they have manufactured or imported at least 10 tonnes of finished plastic packaging components within the last 12 months, or if they will do so in the next 30 days.

From 1 April 2022 until 30 March 2023, the 12 months threshold will be worked out in a different way.

How does a business register for the plastic tax?

If you are liable for the tax, you can register from 1 April 2022 at gov.uk here.

HMRC recommendations to businesses

Recommendations have been set out by HMRC, providing steps that businesses should take in preparation of this tax. These include checking existing records and ensuring they can accurately verify the composition and source of any plastic packaging

Where a business is unable to provide evidence of the recycled composition of their plastic packaging, the assumption by HMRC will be that any plastic contains less than the 30% recycled plastic and will be subject to the tax.

Further information

Further information on PPT can be found on gov.uk here. This includes information on how to register and what to do ahead of registering.

Alexander & Co – expert tax advice