All you need to know about Plastic Packaging Tax

What is the Plastic Packaging Tax and when will it take effect from?

The UK Government is introducing a brand-new tax on plastic packaging which will take effect from 01 April 2022 and will encourage the use of recycled rather than new plastic within plastic packaging.

Why is the Plastic Packaging Tax being introduced?

The Plastic Packaging Tax complements extended producer responsibility (EPR) by increasing demand for recycled plastic. The aim of the tax is to provide a clear economic incentive for businesses to use recycled plastic in manufacturing of plastic packaging, which in turn will create greater demand for this material. Bigger demand will stimulate increased levels of recycling and collection of plastics, diverting it away incineration or landfill.

Which products will be affected?

The primary legislation (Finance Act 2021) specifies that the tax will apply at a rate of £200 per tonne on all plastic packaging with less than 30% recycled plastic manufactured or imported into the UK, including packaging such as drink bottles.

Will it affect your business?

If you are a business that manufactures or imports 10 or more tonnes of plastic packaging over a 12-month period, you will need to register for the tax. This is regardless of whether you will have to pay any tax. About 20,000 producers and importers of plastic packaging are estimated to be impacted.

Next steps

Start initial assessment of purchased stock packaging with your procurement team. Check if plastic packaging components you manufacture or import are chargeable for Plastic Packaging Tax, and if and when you need to register. Visit: https://www.gov.uk/guidance/examples-of-tests-and-calculations-for-plastic-packaging-tax for examples of tests and calculations for Plastic Packaging Tax.

How can SUEZ help you?

Recycling content is only a part of packaging design and we help our customers to explore and consider wider design issues and futureproof their designs as well as their supply chains. In the years to come, the tax threshold will increase beyond 30%, and so will the penalties. Talk to our experts, who are leading discussions on a number of reforms that will shape the industry and might impact your business.