The government has published a consultation, ‘Plastic Packaging Tax policy design’. This examines policy design options for the proposed new tax on plastic packaging.
This consultation on Plastic Packaging Tax sets out the key tax features including:
- The scope of the tax by definition of the type of taxable product and recycled content.
- The due diligence and feasibility to evidence what percentage is recycled plastic.
- The exemption for producers and importers of small quantities of plastic packaging.
- Who will be liable to pay the tax and need to register with HM Revenue & Customs (HMRC)?
- How the tax will be collected, recovered and enforced.
The consultation closes on 28 August 2020, (extended from 20 May).
This new tax will commence in April 2022, at a rate of £200 per tonne of plastic packaging if it does not contain at least 30% recycled plastic.
Businesses will need to act now if they are looking to avoid paying this new tax. Any advance in science or technology in doing this may qualify for R&D relief.
The consultation has closed and a policy paper has been published with draft legislation. The tax will take effect as follows:
- Plastic packaging will be subject to this tax where:
- Categorised as predominantly plastic with reference to weight.
- Where less than 30% is made up of recycled plastic.
- The tax will apply to plastic packaging produced in the UK, or, imported (filled or unfilled) into the UK.
- The tax will £200 per tonne per annum (apportioned for part of a tonne).
- The tax will apply over a threshold of 10 tonnes per annum (small quantities to be exempt).
- Exemptions include:
- Where used in the immediate packaging of licensed human medicines.
- Where used as transport packaging of imports or if exported (unless used a transport packaging).
The liability will fall on the UK producer or the person for whom the packaging is being imported. Those subject to the tax must be added to the register of those liable. There will be a 30 day period from when the liability arises in which to notify HMRC.
Plastic Packaging Tax
What is Plastic Packaging Tax? Who does it apply to? Are small businesses subject to Plastic Packaging Tax?
Research and Development (R&D) Zone
Explore our R & D resources to see what relief you can claim, with worked examples and reporting templates.