The Plastic Packaging Tax (PPT): How Will This Impact Your Business?

A new tax on plastic packaging comes into effect in the UK on 1st April 2022. The tax will apply to finished (filled or unfilled) plastic packaging components produced in or imported into the UK. The main exception to PPT being charged is if the plastic packaging produced contains at least 30% recycled plastic.

Here are some key facts that have seen PPT being introduced as part of the UK’s wider Plastic Pact, which targets the elimination of single-use plastics and the effective recycling or composting of 70% of the UK’s plastic packaging, by 2025:

• 2.3m tonnes of plastic packaging waste was placed on the UK market in 2019 (although this is thought to have reduced to 2.1m tonnes during COVID)
• UK Local Authorities collected approx. 572,000 tonnes of plastic packaging in 2020
• Circa 1.2m tonnes of the UK’s plastic packaging was recycled in 2020, but more plastic packaging is being exported than processed within the UK
• The weighted average recycled content of primary consumer plastics packaging placed on the UK market was around 13%
• Former export markets for UK plastic waste (China, SE Asia and Turkey) have all placed restrictions/bans on material produced through mechanical treatment of waste plastic from the UK

Which businesses will be liable to pay PPT?

Any UK business that manufactures or imports (1) plastic packaging or (2) products contained in plastic packaging is required to register for PPT and pay any tax due.

The most likely types of UK companies to be affected by the introduction of PPT are:

• Packaging manufacturers;
• Online retailers;
• Food and drink sectors;
• Pharmaceutical, chemical, oil & cosmetics industries.

Subject to certain exemptions, all relevant plastic packaging will be taxed at £200 per tonne, unless liable businesses can provide valid evidence that the packaging they produce or use, contains >30% recycled content.

What are the other exemptions from the imposition of PPT?

The following exemptions from having to pay PPT will apply:

• Businesses manufacture or import less than 10 metric tonnes of plastic packaging per annum;
• Plastic packaging containing 30% or more recycled plastic;
• The packaging material of which 50% or less by weight is plastic;
• Packaging material intended for licensed human medicines;
• Packaging material intended to be exported out of the UK within 12 months;
• Plastic packaging where the packaging function is secondary to the storage function (e.g. DVD and CD cases, tool boxes, board game boxes);
• Plastic packaging that is an integral part of the product (e.g. print cartridges, inhalers, teabags).

What will PPT mean to most of Countrystyle’s Customers?

The new Plastic Packaging Tax will incentivise the packaging industry to use a greater proportion of recycled material in the production of plastic packaging. It is anticipated that all Customers of Countrystyle Recycling will be impacted by PPT in the following ways:

1. If your business continues to use plastic packaging that has less than 30% recycled content, you will inevitably have to pay more for this type of packaging. Just like landfill tax when it was first introduced in 1996, it is inevitable that PPT will increase year on year as an incentive to increase plastic recycling;
2. The need to exceed the 30% recycled plastic content threshold will increase the demand for recycled plastic material;
3. You need to ensure that your business is engaged in finding ways to improve your plastic recycling rates by properly segregating the main types of plastic that can be recycled more easily, being:

If your business is a manufacturer of plastic packaging and will have registered for PPT or if you produce any of the above plastic waste streams, please contact the Countrystyle Recycling team on 0344 880 7700 or email us at sales@countrystylerecycling.co.uk and we would be delighted to help you with your plastic recycling needs.

Disclaimer:

This article dated 8th February 2022 is intended to provide a general summary of the UK Plastic Packaging Tax and does not constitute legal advice.