Jurisdiction: United Kingdom

Commencement: 1st July 2023

Amends: The Plastic Packaging Tax (General) Regulations 2022
Mini Summary

The Plastic Packaging Tax (General) Regulations 2022 sets out detailed administrative requirements, which come into force on 1st April 2022. Definitions are given to establish when a plastic packaging component is considered ‘finished,’ and therefore chargeable to the tax. It also details record keeping and weighing requirements and how to determine the recycled plastic content. The Plastic Packaging Tax only applies to packaging components containing less than 30% recycled plastic, however organisations that manufacture or import 10 or more tonnes of plastic packaging annually must register for the tax.

Duties
Various duties apply.

 

Amendment

Changes are made to the method in which tax credits are claimed in respect of the Plastic Packaging Tax (PPT). It allows organisations to claim for a tax credit which arises in the same accounting period as the claim.

Previously, organisations were prevented from doing so due to technical issues, and as an interim measure, they were provided guidance on how to claim a tax credit in this circumstance.

This change ensures that The Plastic Packaging Tax (General) Regulations 2022  is aligned with guidance on the process of claiming a tax credit using the PPT online service.

 

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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: 

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

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.

Jurisdiction: Wales

Commencement: 1st April 2022

Amends:

Mini Summary

The Landfill Disposal Tax (Tax Rates) (Wales) Regulations 2018 specify the first standard rate, lower rate and unauthorised disposals rate for the landfill disposal tax in Wales.

The Landfill Disposals Tax (Wales) Act 2017 establishes the legal, administrative and operation framework for the Landfill Disposal Tax in Wales. A tax is to be charged on taxable disposals of materials. A taxable disposal is made when material is disposed of to landfill, in an authorised landfill site with an environmental permit in Wales.

Responsibility for landfill tax in Wales has been transferred to the Welsh Government from April 2018 and consequently the Landfill Disposal Tax replaces the UK Landfill Tax scheme (WAS14) in Wales.

The amount of tax chargeable on the disposal is to be calculated by multiplying the taxable weight of the material in tonnes by the standard rate, the lower rate or unauthorised rate for qualifying materials.

These Regulations specify the first standard rate, lower rate and unauthorised disposals rate for landfill disposals tax and will apply to a taxable disposal made on or after 1 April 2018.

The standard rate is £88.95, the lower rate is £2.80 and the unauthorised disposals rate is £133.45.

The lower and standard rates of tax will remain consistent with those in the rest of the UK for a period of 2 years – until April 2020.

From the 1st April 2020 the new tax rates are as follows:

Amendment

The standard landfill tax rate, lower landfill tax rate and unauthorised disposals landfill tax rate are updated from 1st April 2022.

From 1st April 2022, the standard rate will be £98.60 per tonne, the lower rate will be £3.15 per tonne, and the unauthorised disposal rate will be £147.90 per tonne.

All landfill disposals made before 1st April 2022 remain subject to the rates set by The Landfill Disposals Tax (Tax Rates) (Wales) (Amendment) (No. 2) Regulations 2020.

There are no changes to duties for organisations.

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Air pollution is one of the biggest continuing threats to public health in the UK. Red diesel accounts for around 15% of all diesel used in the UK and is responsible for the production of nearly 14 million tonnes of carbon dioxide a year. 

It is no surprise therefore that the government is targeting fuel usage, in a way to achieve net zero by 2050 and meet UK climate change and air quality targets.  

Many businesses and individuals currently supply and / or use rebated gas oil (red diesel), rebated biofuels and other rebated fuels. The cost of these are significantly reduced by the Government for use in certain machinery, activities and sectors.

However, within the Budget 2020, the Government announced that from April 2022 it will remove the entitlement to use red diesel and rebated biodiesel from most sectors.

The change is happening to incentivise the development and adoption of greener alternatives. Costs will better reflect the harmful impact of the emissions produced, and assist in incentivising users of polluting fuels (like diesel) to improve the energy efficiency of their vehicles and machinery, invest in cleaner alternatives, or just use less fuel.
What does this mean for users of red diesel?
This change will require many businesses to use fuel that is taxed at the standard rate for white diesel. Current users of red diesel may encounter costs in the following forms:


What does this mean for suppliers of red diesel?

Current fuel suppliers (Registered Dealers in Controlled Oils or RDCOs) may encounter costs in the following forms:

However, fuel suppliers could see a continuing saving as the need to record information for rebated fuel users will decrease.

Where can red diesel still be used?

Following this ban some sectors that remain eligible to use red diesel are:

Note: The propelling of private boats used for pleasure in Northern Ireland will require the use of white diesel to propel their aircrafts. A new relief scheme will be introduced for private pleasure craft users in Northern Ireland, so they can claim a relief for the proportion of their fuel that will be used for non-propulsion.

Enforcement

Where changes are not adhered to, Her Majesty’s Revenue and Customs (HMRC) can seize vehicles or machines which have lost entitlement to run red diesel.

HMRC may decide not to seize such vehicles or machines if the fuel remaining in the vehicle, machine, appliance or heating system was taken in for a permitted purpose before this change in law, and the fuel is still being used for the same purpose.

This measure will also extend fuel duty to biodiesel, bioblends and fuel substitutes used in heating, applying the rebated duty rate to non-commercial heating and the full rate of duty to commercial heating.

For more information about the reform of red diesel, guidance can be accessed here.

To Summarise:

What is the plastic packaging tax?
The Plastic Packaging Tax is a tool that is implemented by the HM Revenue and Costumes that encourages the use of recycled material in plastic packaging. Overall, the aim is to create a positive impact on the natural environment by reducing the processes of landfill and the incineration of plastics.

From 1 April 2022, certain plastic packaging material manufactured in and imported to the UK would be taxable.
Would your business be affected?
Firstly, are you a manufacturer or importer of 10 or more metric tonnes of plastic packaging over a 12-month period?  Does your business produce or import any plastic packaging that contains less than 30% of recycled plastic? If the answers to these questions are ‘yes,’ then you are liable to pay the tax.

Though the criteria seem straightforward, there are a few yet important details that should be noted. For example, manufacturers and importers of less than 10 tonnes of plastic packaging a year would be exempted from paying the tax but would still need to keep records. These records are expected to be simple and only serve to prove that your business falls under 10 tonnes of plastic packaging a year.

Also, if the plastic packaging you import or manufacture contains more than 30% recycled plastic, you will still need to register if you import or manufacture over 10 tonnes of plastic packaging annually.

This tax also applies to imported packaging which already contains goods such as drinks. In this case, the tax only applies to the actual plastic packaging.
How to prepare your business
It is also important to note that the Finance Act 2021 is the primary legislation that has introduced the tax and associated duties, however further regulations are expected to provide more detail on the duties in the coming months, which we will notify you of as they are published.

It is important to know that your business may be exempt from the tax if the plastic packaging contains:

For now, if you are certain that the Plastic Packaging Tax applies to you and that this tax has a significant impact on your business, you may consider if any changes could be done to reduce the impact. For example, is it possible to increase the recycled content of the plastic packaging to over 30%? Is sourcing alternative products an option? Ideally, you should start asking these questions now.

 

Jurisdiction: UK

Commencement: 22 July 2020

Summary

The Finance Acts 1996 to 2020 confirm and detail environmental taxes and duties as summarised below. This includes: 

 The rates specified in this entry are from the Finance Act 2020 (c.14) and apply from 1st April 2020. 

Businesses are affected by the charges for waste disposal to landfill, energy use and carbon emissions. 

 

Duties

Vehicle Excise Duty

Rates payable: 

Light passenger vehicles registered before 1st April 2017 (vehicles other than higher rate diesel vehicles)  

CO2 emissions    Rate (£)   
Exceeding g/km    Not exceeding g/km    Reduced rate (£)    Standard rate (£)   
100    110    10    20   
110    120    20    30   
120    130    115    125   
130    140    140    150   
140    150    155    165   
150    165    195    205   
165    175    230    240   
175    185    255    265   
185    200    295    305 
200    225    320    330 
225    255    555    565 
255    –    570    580 

 

Light passenger vehicles registered on or after 1st April 2017 (vehicles other than higher rate diesel vehicles)  

CO2 emissions   Rate (£)  
Exceeding g/km   Not exceeding g/km   Reduced rate (£)   Standard rate (£)  
  50     10  
50   75   15   25  
75   90   100   110  
90   100   125   135  
100   110   145   155  
110   130   165   175  
130   150   205   215  
150   170   530   540  
170   190   860   870  
190   225   1295   1305  
225   255   1840   1850  
255   –   2165   2175 

 

Higher rate diesel vehicles  

CO2 emissions  
Exceeding g/km   Not exceeding g/km   Rate (£)  
  50   25 
50   75   110 
75   90   130  
90   100   150  
100   110   170  
110   130   210  
130   150   530  
150   170   855  
170   190   1280 
190   225   1815  
225   255   2135  
255   –   2135  

 

Landfill tax

Two different rates of landfill tax exist for the disposal of relevant waste made at authorised landfill sites in England and Northern Ireland. Rates for disposal made on or after 1st April 2020 are: 

Inert or inactive waste, e.g. rocks or soil, is subject to the reduced rate. 

From 1st April 2018, the landfill disposal tax replaced the UK landfill tax in Wales. For further information and rates, see The Landfill Disposal Tax (Tax Rates) (Wales) Regulations 2018. 

 For landfill tax rates in Scotland, see the Landfill Tax (Scotland) Act 2014 for further information. 

 

Climate change levy

Climate change levy rates that apply from 1st April 2020   

Taxable commodity supplied  Rate at which levy if supply is not a reduced-rate supply 
Electricity  £0.00811 per kilowatt hour 
Gas supplied by a gas utility or any gas supplied in a gaseous state that is of a kind supplied by a gas utility  £0.00406 per kilowatt hour 
Any petroleum gas, or other gaseous hydrocarbon, supplied in a liquid state  £0.02175 per kilogram 
Any other taxable commodity  £0.03174 per kilogram 

 

Climate change levy rates that apply from 1st April 2021  

Taxable commodity supplied   Rate at which levy if supply is not a reduced-rate supply  
Electricity   £0.00755 per kilowatt hour  
Gas supplied by a gas utility or any gas supplied in a gaseous state that is of a kind supplied by a gas utility   £0.00465 per kilowatt hour  
Any petroleum gas, or other gaseous hydrocarbon, supplied in a liquid state   £0.02175 per kilogram  
Any other taxable commodity   £0.03640 per kilogram 

 

Aggregate levy

Aggregate levy is a tax on sand, gravel and rock that has either been: 

If your business exploits aggregate in the UK (i.e. a quarry operator), you must tell HMRC how much aggregate you have produced or sold. 

Certain materials are excluded from the tax. A full list of exempted materials can be found here. 

The current levy is £2.00 per tonne for sand, gravel or rock. 

 

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