Plastic Packaging Tax: Everything You Need To Know

In April 2022, the plastic packaging tax came into force which will impact not just companies who operate directly within the plastic packaging industry, but any company who imports or manufactures a certain volume of plastics for use in the packaging of their products. Its aim? To encourage greater use of recycled plastic and help tackle plastic waste.

In this article we will explain what the plastic packaging tax is, who needs to pay it, how much you might have to pay, and more.

What Is The Plastic Packaging Tax 2022?

The tax applies to plastic packaging manufactured in or imported into the UK that contains less than 30% recycled plastic and applies to almost all types of packaging from mailing bags to pallet wrap. This includes any plastic used to package imported goods.

An example of recycled plastic is plastic that contains post consumer waste (PCW). PCW is plastic that has served its intended purpose as a consumer product which can then be shredded down, turned into pellets, and put back into the plastic production process.

When Was The Plastic Packaging Tax Introduced?

The tax was first announced in the UK Government’s 2018 Budget and came into force on 1st April 2022.

How Much Is The Plastic Packaging Tax?

When it was first introduced the tax is charged at a rate of £200 per tonne of plastic packaging that does not meet the 30% recycled content stipulation. However, there are exceptions and complications pertaining to multi-component plastic items, which we’ll come onto later.

As of 1 April 2023, it is charged at a rate of £210.82 per tonne, with the same stipulations previously mentioned.

For further information on the impact of the plastic packaging tax read our update on the tax.

Who Needs To Pay The Plastic Packaging Tax?

Anyone who has imported or manufactured 10 tonnes of plastic or more in the UK, which contains less than 30% recycled plastic, since April 1st 2022 has to pay the tax. Businesses that import or manufacture less than 10 tonnes of plastic packaging into the UK in this time frame don’t have to pay the tax.

From 31st March 2023 the time frame changes slightly. Businesses will be required to look back over the last 12 month period, as opposed to back to April 2022, when considering whether they imported or manufactured at least 10 tonnes of plastic.

All businesses who meet the 10 tonne threshold of plastic imported or manufactured must register with HMRC for the plastic packaging tax, whether their packaging contains 30% recycled content or not. However, only those whose plastic doesn’t contain at least 30% recycled content need to pay the tax.

The tax applies to the person who owns the product at the point of manufacture or import. However, the liability doesn’t end there. Due diligence is required on the part of those purchasing from a manufacturer or importer, as if the tax hasn’t been paid by them, the buyer is jointly liable. Therefore, it is important to check with suppliers that the tax has been paid.

The industries this could affect include:

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

For more information and guidance on whether you need to register for the plastic packaging tax, visit the Government’s guidance page.

Who Is Exempt From Paying the Tax?

There are 4 main categories where companies may be exempt from paying the tax. These categories pertain to companies that produce products that are:

• Used for immediate packaging of licensed human medicines
• Permanently recorded as being set aside for non-packaging use
• Used as transport packaging to import multiple goods safely into the UK
• Used in aircrafts, ship or rail good stores

There are also 3 main types of products which are excluded from the tax. These don’t need to be included when working out the total weight. These include products which are designed to be:

• Used in the long term storage of goods (such as toolboxes, first aid kits)
• An integral part of the goods (such as printer cartridges, water cartridge filters, inhalers)
• Reused for the presentation of goods (such as sales presentation stands, shop fittings, sales display shelves)

However, other elements of plastic packaging which are in place when the item is sold and do not stay in place when the product is in use (such as films which are used to wrap CD Jewel Cases) are subject to the tax.

For more detailed information regarding the exceptions, check out the guidance on the UK Gov website at:

https://www.gov.uk/guidance/check-which-plastic-packaging-is-exempt-from-plastic-packaging-tax

To help you better understand the range of stipulations and exemptions, here’s a handy flowchart to find out whether you need to pay the plastic packaging tax:

What About Multi-Component Items?

There are some complications when it comes to multi-component items i.e. packaging that is made up of materials other than plastic. So what counts as ‘plastic’ packaging?

For the purposes of this tax, any packaging that contains more plastic than any other single component is considered plastic packaging and the new plastic packaging tax applies to it. For example, if a piece of packaging weighed 10 grams, and was made up of 4 grams of plastic, 3 grams of aluminium, and 3 grams of cardboard, then this piece of packaging would be classed as ‘plastic packaging’ under the rules of this tax.

How To Register For The Tax

If you’ve manufactured or imported at least 10 tonnes of plastic since 1st April 2022, you need to register for the tax with HMRC, even if your plastic meets the 30% recycled plastic threshold. You must register within 30 days of meeting the 10 tonnes threshold. You may need to pay a penalty if you do not.

To register, you’ll need to provide HMRC with one of the following pieces of information about the estimated weight of finished plastic packaging components:

• The amount you expect to manufacture or import in the next 12 months
• The amount you have manufactured or imported since 1 April 2022
• The amount you expect to manufacture or import in the next 30 days

You’ll also need to provide HMRC with:

• Your business type
• The address and contact details of the person or business you’re registering
• A customer reference number, which could be:
  • The company registration number if you’re registering a company (you can look up the company number) 
  • Your National Insurance number and Self Assessment Unique Taxpayer Reference
  • A charity registration number
• The Government Gateway user ID and password of the person or organisation you’re registering — if you do not have a user ID, you can create one when you register

Register on the Government website here

How We Can Help Reduce Your Plastic Packaging Tax Bills

We care passionately about our industry and the environment. As a result, we are working hard to promote eco-friendly packaging solutions which ultimately use less plastic and more plant-based materials.

For example, we can provide film packaging using IPPlant - a bio based material made from sugarcane which is 100% recyclable and PAS2050 certified.

All of our products contain a minimum of 30% PCW, so if you’re currently using a supplier who includes less, switching to us could instantly save you money in the tax reduction alone (and that’s not even taking into account the savings you could achieve thanks to our competitive pricing).

Get in touch today or give us a call on 0330 094 7197 to find out more.