New regulations could lead to 200,000 tonnes of carbon savings in 2022-23 and increase use of recycled materials by 40%

Legislation will be introduced in Finance Bill 2021 to establish a plastic packaging tax.

This new tax will apply to plastic packaging manufactured in, or imported into, the UK, that does not contain at least 30% recycled plastic. Plastic packaging is defined as packaging that is predominantly plastic by weight.

It will not apply to any plastic packaging that contains at least 30% recycled plastic, or any packaging that is not predominantly plastic by weight.

Imported plastic packaging will be liable to the tax, whether the packaging is unfilled or filled.

The key features of the tax include:

  • a £200 per tonne tax rate for packaging with less than 30% recycled plastic
  • a registration threshold of 10 tonnes of plastic packaging per annum manufactured in or imported into the UK
  • the scope of the tax by definition of the type of taxable product and recycled content
  • exemption for manufacturers and importers of small quantities of plastic packaging
  • who will be liable to register with HMRC
  • how the tax will be collected, recovered and enforced
  • how the tax will be relieved on exports

The aim of the tax is to increase the use of recycled content in plastic packaging; it is estimated that, as a result, the use of recycled plastic in packaging could increase by around an estimated 40%. This is equal to carbon savings of nearly 200,000 tonnes in 2022-23, based on current factors. The policy may also help to divert plastics from landfill or incineration, and drive recycling technologies within the UK.

This article has been shared from ACCA In Practice, to whom copyright belongs.  Whitefield Tax are an ACCA Member Firm