In the Budget 2018, the government announced that it will introduce a tax on plastic packaging from April 2022 to encourage the use of recycled plastic. The aim is to create greater demand for recycled plastic, and in turn stimulate increased levels of recycling and collection of plastic waste, diverting it from landfill or incineration. In 2020, the government announced that Plastic Packaging Tax will apply at a rate of £200 per tonne where it does not contain at least 30% recycled plastic. This will apply where it has been manufactured in, or imported into, the UK. The government will keep the rate of the tax and percentage under review to ensure that it remains effective in increasing the use of recycled plastic.

The scheme was also broadened following a previous public consultation to increase the scope of the tax to imported filled plastic packaging rather than just imports of unfilled plastic packaging. It will also provide an exemption for businesses that manufacture or import less than 10 tonnes of plastic packaging in a 12-month period. This will ensure the administrative burden and cost of collecting the tax are not disproportionate to the environmental harms the tax seeks to address

This consultation focuses on further amendments to the proposals including:

  • A revised definition to the definition of plastic to broaden the capture of the scheme.
  • Closing a loophole that would allow packaging type plastics produced to avoid the tax until they are used for a packaging type function
  • Excluding transport packaging used to move imported goods, such as pallets and wrapping, due to the lack of records available currently.
  • The addition of a n exemption for human medicines packaging if this is feasible to implement
  • An intention not to exclude packaging which Is damaged, unfit for use or is not paid for by the recipient.

The consultation is also seeking on advice as to which party should be responsible for the tax payment and how the cost of the tax should be addressed on sales invoices.

A significant inclusion is the intention to include a ‘joint and several liability’ for the tax to other persons in the supply chain in certain situations to act as a deterrent to overseas operators failing to comply with the regulations. Where the liable person does not account for the tax, joint and several liability allows HMRC to collect tax due from other people involved in the supply chain. The government is seeking views on whether this is reasonable and what issues may be encountered in enforcing this.

This is a significant step forward in reducing plastic waste in the UK and is a consultation that many people will have strong views on. We are formulating our response to the consultation and would welcome your feedback to incorporate into this so this collective voice can deliver a powerful message in support of this legislation.

The consultation closes on 20TH May 2020. To have your say, please email the compliance team at compliance@carbonxgen.com or to discuss this further please call Melanie Kendall-Reid on 01252 87 87 22.

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