What materials and products will be impacted?
Any plastic packaging that contains less than 30% recycled packaging will be levied. So, any packaging that’s predominantly plastic by weight will be taxed. This includes plastic drinks bottles, food wraps and film.
Organic plastics may also incur tax. At present, if you’re using green packaging that’s compostable or recyclable and has less than 30% recycled plastic, you will be taxed. However, this is being reviewed by the government and could change at a later date.
Will there be an economic impact?
Whilst we won’t know the economic impact of the plastic levy until it has been in place for a while, the tax should increase the demand for recycled plastic and therefore the amount of plastic being recycled, reducing the amount of plastic ending up in landfills.
There may be a shift in workplace culture, as it is thought that this will impact an“estimated 20,000 manufacturers and importers of plastic packaging.” The Government also predicts there will be one-off costs for companies as they familiarise themselves with the regulations, register with HMRC, get their reporting in place and train their staff.
Behavioural responses to the tax incentive will also be taken into consideration, including smaller actions such as reducing the use of plastic packaging use, and reduced levels of productions containing plastic packaging being purchased.
What happens if you don’t comply with the tax?
The government will enforce anti-avoidance rules for businesses trying to avoid this tax.
If you don’t register with HMRC, fail to comply, file your returns or do not pay, there will be a penalty.
What’s exempt from the plastic packaging tax?
There are some instances where certain uses of plastic packaging won’t be levied. This includes packaging that is used:
- For licensed human medication, first aid boxes or any products that fall within regulation 2 of the Human Medicines Regulations 2012
- As transport packaging for goods into the United Kingdom.
- Packaging that is used on railway stores, aircraft and ships going on international journeys.
- That is permanently designated for use other than a packaging use (this doesn’t include protection, handling, delivery or presentation).
- Exported goods that are transported overseas within 12 months.
- Other products such as CDs, DVDs and game cases, printer and toner cartridges and toolboxes are also exempt from the tax.