From April 1st 2022, the UK Government implemented the Plastic Packaging Tax – a tax of £200 per tonne on all plastic containing less than 30% recycled material. The tax is aimed at reducing the use of virgin plastic in order to drive the growth of the UK plastic recycling industry.

The Plastic Packaging Tax seeks to promote the use of recycled plastic by stimulating end markets and providing economic opportunities.

By establishing and enforcing these measures, we can make a significant impact on the amount of packaging that goes to landfill. 

A future tax revenue increase will likely benefit recycling sustainability and waste management, much like the Producer Responsibility Packaging Waste Regulations did.

In the UK, this tax targets companies that produce plastic packaging, import plastic packaging, or import filled plastic packaging, where the plastic packaging contains less than 30% recycled content per component. To illustrate the concept of per component basis, a drinks bottle provides a good example, consisting of a bottle, a label, and a lid (i.e. 3 components in total).

For UK manufacturers and importers of plastic packaging meeting the threshold of 10 tonnes and over, the tax due will be deposited quarterly with HMRC.

There is a clear economic reason to use plastic packaging with a high recycled content, as products containing 30% or less recycled content will be taxed at £200 per tonne under the new rules. If non-compliance is found, HMRC may check tonnage with other environmental authorities, such as the Environment Agency for the Producer Responsibility Packaging Waste obligations.

Everyone will, in the end, pay for the affect the Plastic Packaging Tax has on the manufacturers and importers of the affected products, as the prices will be increased to the consumer to compensate.

Officially;

• Where the packaging or component is produced in the UK it is the producer (manufacturer) who pays the tax.
• Where it is imported to the UK it is the person on whose behalf the packaging or component is imported who pays.

Care and due diligence is required when there is a supply chain involved to establish who is liable to the tax.