Diamond Box’s Comprehensive Guide to The New UK Plastic Packaging Tax

What Is the UK Plastic Packaging Tax?

The UK plastic packaging tax was introduced in April 2022. According to the UK plastic packaging tax legislation, this tax only applies to plastic packaging that is manufactured in, or imported to, the UK and which does not contain at least 30% recycled plastic. Please note that imported plastic packaging also includes packaging on goods.

What is recycled plastic? Recycled plastic can be reused after being recovered using chemical or manufacturing processes. It can be used for its original purpose or it can be modified during the manufacturing process.

Those affected by the tax will need to pay £200 per tonne of plastic used. However, this figure may rise if there is a significant increase in demand for recycled plastic but there is not enough supply. Ultimately this would increase the cost of recycled plastic. Therefore, this would make plastic more appealing (as there would be no changes in cost), which may lead to an increase in the price of plastic packaging tax to counteract this movement.

Why Is the UK Plastic Tax Being Introduced?

In a time when businesses and consumers are aware of the environmental impacts our habits have, the UK government released the UK plastic packaging tax. This was introduced to encourage businesses to use recyclable and sustainable material instead. In doing so, the number of items recycled should increase and less plastic should go to landfill or incineration. Therefore, helping the environment.

By increasing demand for recycled plastic materials, it should lead to more investment in recycling infrastructure, potentially encouraging new businesses to be created that specialise in recycled materials and plastic.

The EU introduced their own plastic packaging tax in 2021. Member states are charged €800 per tonne. Though it should be noted this levy applies to the entire member state rather than individual manufacturers and importers. This encourages member states to ease their use of single use plastic whilst increasing investment into the research and development of sustainable materials.

Plastic Packaging Tax: Who is Liable to Pay?

As mentioned above those that manufacture plastic packaging or import plastic packaging to the UK are subject to pay the UK plastic packaging tax according to UK plastic packaging legislation. This includes those who import goods that are packaged in plastic. For example, plastic bottles filled with water.

It should be noted that the amount of plastic packaging being imported or manufactured by a business will only be subject to the UK plastic packaging tax if 10 or more tonnes is imported or manufactured into the UK over a 12-month period. As mentioned above, plastic packaging which contains less than 30% recycled plastic will be subject to UK plastic tax.

At the moment HMRC have no current plans for importers and manufacturers to prove that their plastic packaging is made up of at least 30% of recycled plastic. However, it’s good practice for importers and manufacturers to keep a record of their plastic packaging supply chain despite this.

Companies in the following sectors may be impacted:

• Packaging manufacturing
• Industrial manufacturing
• Consumer goods
• Cosmetics
• Online retail
• Food and drinks
• Chemical
• Pharmaceutical
• Oil

Based on plastic packaging tax legislation, those impacted should register for the UK plastic packaging tax, if they have imported or manufactured 10 tonnes or more of plastic packaging components since 1 April 2022.

Consumers may be subject to pay higher prices if businesses pass on the cost. This applies to when consumers buy plastic packaging goods or goods that are wrapped in plastic packaging. According to the UK government’s plastic packaging tax guide, if the tax is passed on to consumers the additional tax costs will only make up a small amount of the total cost of goods.

What Types of Packaging are Being Affected?

The UK plastic packaging tax guide states that there are 2 types of plastic packaging affected: packaging used in the supply chain and single-use consumer packaging.

Whether a package is considered plastic must be considered. According to the UK plastic packaging tax guidance, plastic is classed as a polymer material where additives or substances may have been added.

Packaging Used in The Supply Chain

The government website states that any plastic packaging which is used by the manufacturer of the goods to the consumer falls under this category.

It must do one or more of the following functions: contain the goods, protect the goods, handle the goods, present the goods or deliver the goods.

Single-Use Consumer Packaging

The government website states that single-use consumer packaging is plastic packaging used by the consumer. It has one or more of the following functions: containment, protection, handling, presentation or delivery.

Examples of single-use consumer packaging include plastic bags, disposable cutlery and gift wrapping (ribbon and tape).

How Will the Plastic Packaging Tax Affect Recycled Plastic Packaging?

As previously mentioned, even if a plastic package contains recycled plastic, the recycled plastic package element must make up at least 30% in order for it to be exempt from the UK Plastic Packaging tax.

If plastic packaging is exported out of the UK within 12 months of it being manufactured or received then it is not liable to pay UK plastic packaging tax according to plastic packaging tax legislation.

Are all Forms of Plastic Packaging subject to The UK Plastic Tax?

There are several plastic products and components which are exempt from this charge. Including plastic packaging that is in direct contact with medicinal products, have a long-term primary use (e.g., toolbox), whereby the contents within the packaging rely on the packaging (e.g., teabags), where the packaging is designed for the display of goods or when used for aircraft, ship and rail.

The use of multiple materials may also be subject to UK plastic packaging tax. Multi-material products contain a mix of materials. If non-recycled plastic is the largest single material by weight, then UK plastic tax will apply. It should be noted that the amount of plastic packaging tax would be based on the entire weight of the plastic packaging, not just limited to the “non-recycled plastic” element.

Looking For an Alternative Packaging Solution? Discover The Benefits of Switching to Sustainable Cardboard Packaging By…

… checking out our complete guide to sustainable packaging here. You can also find out more about sustainable cardboard packaging and how it can help enhance your businesses brand by contacting a member of the Diamond Box team today either by calling 0121 505 2211 , by emailing sales@diamond-box.co.uk or by using our simple contact form below. We are looking forward to hearing from you.