Plastic Packaging Tax – Only 2 months away…are you prepared?

If you are a UK producer or importer of plastic packaging, including an importer of plastic packaging that already contains goods (e.g. plastic bottles filled with drinks), you must prepare for it.

What is the plastic packaging tax?

Put simply, the Plastic Packaging Tax is a new environmental tax coming into effect on 1st April this year, to encourage the use of recycled rather than new plastic in plastic packaging for a more sustainable business practice. If you are a UK producer or importer of plastic packaging, including an importer of plastic packaging that already contains goods (e.g. plastic bottles filled with drinks), you must prepare for it.

Which plastic packaging is subject to the tax?

The new tax will be payable for chargeable plastic packaging components* produced in or imported into the UK by an organisation for commercial purposes. The rate of tax will be £200 per metric tonne (1,000 kg) of plastic packaging. (N.B. In the case of imported plastic packaging that already contains goods, the tax will only apply to the plastic packaging itself.)

*Chargeable plastic packaging components are finished plastic packaging components (meaning they have undergone their last substantial modification which is when they are packed or filled), with less than 30% recycled plastic when measured by weight.

A few examples of plastic packaging items that could be subject to the tax, depending on their recycled plastic content, are plastic: 

• bottles used for soft drinks, cleaning, or cosmetic products;
• trays or film used to contain or protect goods, e.g. ready meal trays;
• single-use bags, e.g. carrier bags; or
• pots or crates designed to handle and deliver products, e.g. yoghurt pots, fruit or vegetable crates.

Some organisations may be exempt from the tax, however if the plastic packaging they produce, or import is for: 

• licensed human medicine;
• safe transportation of goods;
• aircraft, ship and rail stores; and
• permanent non-packaging use such as first aid boxes.

Who needs to register for the tax?

You will need to register for the Plastic Packaging Tax if you have manufactured or imported 10 or more tonnes of plastic packaging within the last 12 months, or will do so in the next 30 days. But, keep in mind that you only need to pay the tax for chargeable plastic packaging components, so if your plastic packaging contains at least 30% recycled plastic, or is exempt from the tax, you will not have to pay.

Keeping records

Every manufacturer and importer of plastic packaging must keep records of the packaging they manufacture or import, even if they are not required to register or pay the Plastic Packaging Tax. This is to prove that their organisation is exempt.

When to submit a plastic packaging tax return

If you manufacture or import plastic packaging components, you will need to submit a tax return to HMRC every financial quarter, then pay any tax due no later than the last working day of the following month. Where plastic packaging intended for export is shipped within 12 months however, the tax liability will be cancelled.

These are the key things to know about for now, but further information on how to register for the tax, record keeping, and tax returns will be published by the Government within further regulations and guidance prior to April 2022, so keep an eye out for them in your register.