Getting Ready for the New Plastic Packaging Tax

From April 2022, a new tax on plastic packaging is set to be introduced in the UK. Any business that manufactures or imports plastic packaging will be affected, including those that import packaging containing goods, such as plastic bottles filled with drinks.

The Plastic Packaging Tax (PPT) has not been created to earn revenue, rather to reduce the use of new plastics and increase plastic recycling.

What products will be affected by the Plastic Packaging Tax?

Plastic Packaging Tax will be levied on finished plastic packaging that is manufactured or imported into the UK, where less than 30 per cent of the plastic is recycled. Where the packaging already contains goods, the tax will only apply to the packaging element.

Some products will not be subject to PPT. These include items where the packaging function is secondary to the storage function; where the packaging is an integral part of the goods, and where the item is designed primarily to be reused for the presentation of goods.

Where the plastic packaging is included or made for export, it is possible to defer the tax for up to 12 months, as long as requirements are met. If the packaging is exported within the 12-mont period, the tax liability will be cancelled.

How much will PPT cost and what needs to be done?

PPT will be charged from 1 April 2022. It will apply to those manufacturing or importing upwards of ten metric tonnes of plastic per year.

The rate of tax will be £200 per metric tonne of plastic packaging. Most businesses will need to register for the tax, even if the packaging contains more than 30 per cent recycled plastic. Detailed records of the packaging manufactured or imported will need to be kept, regardless of whether a business is registered for PPT. Any business that supplies recycled plastic may find that its customers will require more information about the types and quantities of materials they are being supplied.

What should I do to prepare for the Plastic Packaging Tax?

It is important to start considering now how Plastic Packaging Tax will affect your business, financially or otherwise. Additional record-keeping will be required and processes will need to be put in place, all of which could impact upon staffing and overheads.

You can find more detailed information on Plastic Packaging Tax including how to determine whether your plastic packaging falls within the scope of the tax, here on the Government website.

If you are concerned as to how the new Plastic Packaging Tax will affect your cashflow and profit margins, you are welcome to talk to our experts here at Office Assistants.

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