Everything you need to know about plastic tax

In our recent blog post, we discussed how sustainability is fast becoming a significant priority for businesses across the world.

Multinational companies, such as Coca-Cola and McDonald’s, are already adopting eco-friendly packaging, with countless brands following suit to take steps towards a sustainable packaging approach.

The attitude towards eco-friendly business practices was reverberated by Chancellor Rishi Sunak in his 2020 budget, with the announcement of the new plastic packaging tax (PPT).

We explain the upcoming new plastic tax, what it is and how your business can best prepare for its impact.

What is the plastic ?

The new plastic packaging tax (PPT) comes into force across the UK from 1st April 2022. This is a new tax that will see plastic packaging that contains less than 30% recycled materials incur a tax penalty. It will mostly affect manufacturers and importers of large quantities of plastic packaging (see ‘Who will be affected’ section below).

Why is this being introduced?

The new tax is designed to encourage the use of recycled plastic rather than new plastic, and to provide businesses with a clear incentive to use recycled packaging to manufacture plastic packaging. This will create a greater demand for this material which will, in turn, lead to increased levels of recycling and collection of plastic waste to keep it away from landfill or incineration.

What plastic packaging will not be taxed?

The new tax will not apply to any plastic packaging which contain at least 30% recycled plastic, or any packaging which is not predominantly plastic by weight.

What is the charge of the plastic tax?

As laid out during the Chancellor’s March 2020 budget, the plastic tax will be charged at a rate of £200 per metric ton of chargeable plastic packaging components of a single specification/material type.

Imported plastic packaging

The charge will also apply to all plastic packaging manufactured in or imported into the UK. Imported plastic packaging will be liable to the tax whether the packaging is unfilled or filled, such as plastic bottles.

How much will the tax raise for the government?

It has been predicted that the plastic tax is set to raise £670m for the treasury between 2022 – 2026 and levels of plastic recycling set to increase significantly across the UK.

When will plastic tax not be chargeable?

The tax will not be chargeable on plastic packaging which has 30% or more recycled plastic content. It will also not be taxed in instances where the packaging is made of multiple materials and plastic is not proportionately the heaviest when measured by weight.

Who will be affected?

The government is expecting the impact of the new plastic tax on businesses to be significant, with an estimated 20,000 manufacturers and importers of plastic packaging being impacted by the new tax rules.

The plastic tax is likely going to have a widespread impact within several sectors, including:

  • UK plastic packaging manufacturers
  • Plastic packaging importers
  • UK plastic packaging consumers

Are there any exemptions?

There will be an exemption for businesses who manufacturer and/or import less than 10 metric tons of plastic packaging per year.

Does this tax replace any current legislation?

The introduction of the new tax runs alongside current legislation, rather than replacing the Packaging Recovery Note (PRN) system. Under this system, packaging recycling evidence, otherwise known as Packaging Waste Recovery Notes (PRNs), are certificates of evidence needed by businesses to prove that a tonne of packaging has been recycled, recovered or exported.

This means that any costs incurred by the new plastic tax for businesses will be in addition to any PRN obligations that the companies’ products incur.

A move to eco-friendly packaging

A shift to more sustainable packaging solutions will not only ensure your business is ahead of the game before the new tax is introduced, but is taking vital steps towards adopting a more eco-friendly approach.

Here at Transpack, we are proud to supply an array of sustainable, recyclable eco-friendly packaging solutions to suit your business needs. From compostable bags made from food safe Natureflex™ , Nativia® or Potato starch, to bags made from biodegradable polythene, and 100% recycled polythene or paper, you’ll be sure to find a product to suit your requirements.

We also proudly stock an array of eco-friendly gift and display packaging, postal and protective packaging.

Not sure which eco-friendly packaging to opt for?  Discover more about Transpack’s wide range of solutions in our guide to eco-friendly packaging.

Contact Transpack today

If you are looking to adopt a more sustainable approach to your packaging solutions within your business ahead of the new plastic tax and need assistance, contact Transpack today. Our wide range of eco-friendly packaging solutions will help to display, protect and package your products the sustainable way.

If you have any questions about Transpack’s eco-friendly packaging solutions, please get in touch. Our expert team will be more than happy to answer any queries you have.

There are several ways you can get in touch with the Transpack team. Call us on 02380 869999, fax 02380 666622 or email sales@transpack.co.uk.

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