A study conducted by the waste management company Veolia on preparation for the plastic packaging tax has found that more than 80% of the businesses taking part in the survey were not aware that the tax is being introduced.
The plastic packaging tax is expected to affect around 20,000 UK producers and importers of plastic packaging. The relevant legislation was included the UK Finance Bill 2021, which received the Royal Assent on 10 June 2021.
The tax which is to be implemented from April 2022 will be charged at a rate of GBP 200 per tonne on plastic packaging that contains less than 30% of recycled plastic content. The tax will apply to plastic packaging produced in or imported into the UK that is predominantly plastic by weight.
For the purposes of the legislation recycled plastic is defined as recovered plastic that has been reprocessed by a chemical or manufacturing process; and can be used for its original purpose or other purposes.
The registration threshold for the tax is 10 tonnes of plastic packaging produced in or imported into the UK per annum. The legislation covers provisions for registration and liability for the tax; collection, recovery and enforcement; and relief from tax on exports.
Businesses will need to be aware of the tax before its introduction because they will need to train relevant staff and develop a reporting framework to complete the tax returns. Businesses will incur continuing compliance costs on preparing, filing and paying tax returns and keeping the required records.
The plastic packaging tax is intended to provide an incentive for businesses to use recycled material in the production of plastic packaging, leading to greater demand for this material and encouraging increased recycling and collection of plastic waste, diverting it away from landfill or incineration.