UK plastic packaging tax to take effect from April 2022

On 12 November 2021, HM Revenue and Customs (HMRC) published a new tax, the Plastic Packaging Tax (PPT), to apply to plastic packaging produced in the UK or imported into the UK. The resolution has been legislated in the Finance Bill 2021 and will take effect from 1 April 2022.
HMRC said the plastic packaging tax was levied to improve the level of recycling and collection of plastic waste and to supervise exporters’ control over plastic products.

The main contents of the resolution on plastic packaging tax include:
1. The tax rate of less than 30% recycled plastic packaging is £200 per ton;
2. Businesses that produce and/or import less than 10 tons of plastic packaging within 12 months will be exempt;
3. Determine the scope of taxation by defining the types of taxable products and the content that can be recycled;
4. Exemption for a small number of plastic packaging producers and importers;
5. Who is responsible for paying taxes needs to be registered with HMRC;
6. How to collect, recover and enforce taxes.
The tax will not be charged for plastic packaging in the following cases:
1. Have a recycled plastic content of 30% or more;
2. Made of a variety of materials, by weight, the weight of plastic is not the heaviest;
3. Manufacture or import of human medicines licensed for direct packaging;
4. Used as transport packaging to import products into the UK;
5. Exported, filled or unfilled, unless it is used as transport packaging to export the product to the UK.

So, who is responsible for paying this tax?
According to the resolution, UK producers of plastic packaging, importers of plastic packaging, commercial customers of plastic packaging producers and importers, and consumers of plastic packaging goods in the UK are liable to pay the tax. However, producers and importers of small amounts of plastic packaging will receive tax exemptions to reduce the administrative burden that is disproportionate to the tax payable.

Obviously, PPT has a very wide range of influence, which undoubtedly sounded the alarm for relevant export enterprises and cross-border e-commerce sellers to avoid large-scale sales of plastic products as much as possible.

Post time: Apr-01-2022