Final Countdown to the Plastics Packaging Tax

Cromwell Polythene, experienced manufacturers and suppliers of products for the capture and containment of materials for recycling, has initiated a ‘Countdown to the Plastic Packaging Tax’ campaign. This is to support businesses and their suppliers prepare for this new policy.

What is the Plastics Packaging Tax?

From the 1st April 2022, this new tax of £200 per metric tonne will apply to plastic packaging manufactured in, or imported into the UK, which contains less than 30% recycled plastic.

Products such as bags and bin liners used by the various industries will be subject to this tax. The primary legislation has been enacted, forming part 2 of the Finance Act 2021. Secondary legislation on this will be introduced later in the year when there may be further policy changes.

It is important to note that the PPT will also apply to EN13432 accredited compostable plastics. This material is still technically a plastic – albeit breaks down to CO2, water, and biomass when composted correctly. It therefore cannot be recycled and consequently, compostable products are classed as ‘virgin’ and therefore subject to the same tax as conventional, fossil-based plastics.

Other items in the scope of the new Plastics Packaging Tax can be found here.

What action should your organisation take?

If you purchase plastic packaging, it is important to contact your suppliers now to make sure they are prepared and that there will be no conflict with compliance, which could leave you exposed to unexpected costs. Although it is the importer or manufacturer of packaging components that is primarily liable for the tax, others in the supply chain can be made secondarily liable, when they know or ought to have known that tax has not been paid.

HMRC has released a guide on steps to take when deciding if you should pay the tax here.

Transparency

If manufacturer or supplier wants to claim packaging contains 30% or more recycled content, they must have records that:

  • Show how they’ve worked out the percentage of recycled plastic
  • Provide sufficient supporting evidence that recycled plastic was used
  • Show which dates the evidence relates to, such as the dates that the components were finished or imported
  • Show which plastic packaging component the percentage relates to, including product lines or production runs
  • Are an accurate reflection of the proportion of recycled plastic contained in the output materials of that recycling process
  • Confirm the source of the recycled plastic

For more information on how to complete due diligence checks for Plastic Packaging Tax, visit here.

Verification schemes exist which offer certification based on the amount of recycled content e.g. packaging waste, processed by accredited recyclers and included in their recycled pellet. These schemes are based on a mass balance method and evidenced through record keeping, auditable by a third party. EUCertplast is one such scheme, which, together with Recylass (for brands and products) provides some assurance to buyers of the recycled content of the item they are buying. This is not the same as guaranteeing the actual recycled content of any specific product, but it’s all the industry has at the moment and the closest a buyer can get to a meaningful assurance.

Cromwell already work to ensure that the recycling, and processing of polythene, meets recognised industry and customer standards, including the use of EUCertPlast certified materials. The objective of EuCertPlast is to encourage environmentally-friendly plastics recycling processes by ensuring traceability of feedstock materials. The certification scheme itself works according to the European Standard EN 15343:2007. This recognises the highest standards of material traceability, process control, and quality of the recycled content in the end-product. This allows virgin plastic to be replaced with recycled materials through successful trials in a variety of industry sectors.

Record Keeping

It is a requirement for manufacturers and importers to keep records of the packaging, even if it contains more than 30%. The records should include;

  • Total amount in weight and a breakdown by weight of the materials used to manufacture plastic packaging, excluding packaging which is used to transport imported goods
  • Data and calculations used to determine if a packaging component is, for the most part plastic, and how much recycled plastic it contains
  • Weight of exempted plastic packaging and the reason for the exemption
  • Amount in weight of plastic packaging exported, and therefore the allowed relief from the tax

For packaging that contains multiple materials, suppliers and manufacturers must record all these, including weights, to demonstrate whether or not the product falls within scope for the tax.

Other Exemptions

There are 3 categories of products which are not chargeable because they are specified in the law as not being classed as a packaging component for the purpose of the tax even though they fall within the general definition.

  • where the packaging function is secondary to the storage function
  • where the packaging is an integral part of the goods
  • designed primarily to be reused for the presentation of goods

There are also 4 types of products which are classed as plastic packaging for the purpose of the tax but are exempted from being chargeable by the law. These are plastic packaging components:

  • Used as transport packaging on imported goods.
  • Used in aircraft, ship and rail goods stores.
  • Used in the immediate packaging of a medicinal product.
  • That are permanently designated or set aside for use other than for a packaging use.

There is also an exemption for small scale production and imports equating to 10 tonnes per year or less.

Invoicing requirements

Initially, HMRC had outlined plans for manufacturers or importers of plastic packaging to record on customer invoices that the tax has been paid. This would require substantial modifications to invoicing systems to provide analysis for each item covered. In light of industry, HMRC has decided this requirement will not be introduced when the rest of the tax takes effect on 1 April 2022. Further information on invoicing will be published in due course, to give businesses more time to prepare.

For more information about the Plastics Packaging Tax or Cromwell Polythene and its sister operation, CPR Manufacturing, email info@cromwellpolythene.co.uk, call 01977 686868 or visit www.cromwellpolythene.co.uk.