Plastic Tax: what it means and who it affects

The basics

Despite the April Fool’s Day start date of its new green tax, the Government is very serious about reducing the impact of plastic packaging. In brief, if less than 30%, by weight, of the material has not been recycled, a tax of £200 per tonne is payable.

Any manufacturer or importer of finished plastic packaging will need to register with HMRC and pay the tax if, in the last twelve months or in the next 30 days, they will reach a volume of ten tonnes of such materials.

The complications

The legislation is causing some confusion. One reason is that defining the responsible manufacturer in a multi-stage process isn’t always straightforward. For example, if your business purchases blank plastic labels and prints them for sale to a third party customer, are you or the supplier of the blank label the manufacturer? For these reasons, it’s important to understand who is liable for the tax. If you buy plastic materials on which the tax hasn’t already been paid, you may find yourself with an unexpected bill.

Another issue arises with packaging made from more than one material, such as a box with both plastic and card elements. In this case, the decision is based on weight. If the plastic is heavier than the card, then the tax applies.

Where multiple types of plastic make up the packaging product – a bottle, with a lid and label is a good example – each plastic may have a different tax treatment.

What to do

If you use plastic packaging – buy it, sell it or use it, it’s worth checking now how the legislation will affect you. Ask your supplier about the amount of recycled materials in their products and if they’re registered for the new tax. If they are vague or non-committal, take care. Someone will end up paying the tax. Although you might think the supplier’s prices are unbeatable, you might face a nasty shock when HMRC catch up and hand you the bill.

As a manufacturer, we’re registered and will be paying the tax. It’s not a cost we can absorb, but if we did, the tax would not meet its objective of reducing the impact of single-use plastics. The pain of the cost increase is meant to modify our choices. Fortunately, we’re ready to help our customers make a smooth transition with options including materials that have 100% recycled content.