From 1st April 2024, manufacturers and importers of plastic packaging in the UK will be subject to a slightly increased rate of tax, at £217.85 per tonne, for plastic packaging containing less than 30% recycled content.
We have been tracking government updates, and as at 7th December 2023, the only significant update is the change of the tax rate, from £200 per tonne to £217.85 per tonne. We would like to reassure you that we have systems and processes in place to ensure the relevant tax is paid. You will notice very little difference now than before the tax was originally introduced, perhaps merely the detail that our invoices may state that 'all plastic taxes have already been paid where applicable', just for legal compliance.
Here are two frequently asked questions, which may help to quickly give you the information you require:
Can you confirm that Richmond will be the responsible party for reporting figures to HMRC for the tax? Yes, Richmond are responsible for reporting figures to HMRC for all applicable products, so you as our customer do not have to do any additional work for any of the products you buy from us.
Can you confirm if your company will be passing on the cost of the tax, how much, and by what means? The tax is something Richmond are responsible to pay to HMRC, so is simply an additional Cost of Goods to us on some of our plastic products. We continue to assess the commercial impact of this, and will advise further, should we see a need to pass on any price increases to our customers at any point.
Not unless you manufacture or import plastic packaging, but bear in mind that this includes importing of 'filled packaging'. It is clear in the bill relating to the tax that it will be payable by producers and importers of plastic packaging within the UK.
There's a bit more to it than that - as always, while the concept of taxing virgin plastic packaging is simple, when it comes to defining the rules, it gets a little more complex! Download the HMRC's own flowcharts and guides below to find out if your product and/or company is liable:
Current government guidance states that the tax is "not expected to have any significant macroeconomic impacts", and that even if tax is passed on to consumers in the form of price increases, "the cost to consumers will be small as plastic packaging usually makes up a very small amount of the total cost of goods".
We do think it's important to reinforce the point that imported packaging is to be liable for the tax whether the packaging is 'filled or unfilled' - so it will apply to products being imported into the UK in plastic packs.
Obviously, if the plastic packaging has 30% or more recycled content, it will not be taxed.
Other exceptions will include:
There are other more complex aspects too, such as whether the product could actually not be used at all by any method, without the plastic component. The HMRC guides which can be downloaded above are very useful in running through all of the criteria. The Richmond team will be happy to talk to you about this, but we are not legal advisers, therefore the information in this blog, and any information given informally, cannot be treated as legal advice and cannot be taken in lieu of legal advice.
The most straightforward way to avoid the tax is to use either plastic packaging with greater than 30% recycled content, or to choose alternatives to plastic materials.
As this is not always possible, or indeed may not always be the most environmentally friendly option when you consider your entire Product Lifecycle Analysis, you should also ensure that you have calculated the actual cost impact on your product (given that packaging is not normally the biggest proportion of the product cost, and at £200* per tonne, the tax may not cause significant increase). *UPDATE as at 7th December 2023 - at Autumn Statement 2023, the government announced that the rate of Plastic Packaging Tax (PPT) will increase in line with the Consumer Price Index (CPI). The new rate of PPT will be £217.85 per tonne and will apply to all plastic packaging, containing less than 30% recycled plastic that is manufactured and imported into the UK on and after 1 April 2024.
The percentage of recycled content is calculated by weight, on each individual piece of packaging manufactured or imported. The proof of the content will be the individual specification sheets. This means, if our assumptions are correct, that in the example above the bottle should contain at least 30% recycled content AND the pump should also contain at least 30% recycled content. We do not, however, recommend basing any major decisions on this assumption alone, and we recommend that you seek professional advice if you are unsure.
We are pleased to say that Richmond are working in advance of the introduction of this tax (due for implementation 1st April 2022) and already have a number of products in our range which contain 30% or more recycled content. The amount of recycled content (PCR or Post-Consumer Recycled resin) in our plastic products is denoted by PCR, followed by the percentage. For example, a product with 30% recycled content would contain 'PCR30' in the description.
Please note that we can produce other products in PCR plastics, but a specific MOQ will apply for each project. You can contact us to enquire, or call the office on 01355 236 170 or 0208 057 4440.
You can view the current stock products containing 30% recycled content or more, using the buttons below: