From 1st April 2022, manufacturers and importers of plastic packaging in the UK will be subject to a tax of £200 per tonne, for packaging containing less than 30% recycled content.
So will I have to pay the tax?
It is not clear exactly how the tax will work, although 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. However, we are awaiting further clarifications on the mechanics of the tax from government sources.
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".
You should note, however, 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.
Are there any exceptions?
Obviously, if the plastic packaging has 30% or more recycled content, it will not be taxed.
Other exceptions will include:
- Plastic packaging being manufactured or imported as immediate packaging of licenced human medicines
- Plastic in use as 'transport packaging' to import products into the UK
- Plastic packaging being exported out of the UK, unless it is in use as 'transport packaging'
- Packaging containing multiple materials, where they do not contain more plastic than any other single material, by weight
- Companies manufacturing or importing less than 10 tonnes of plastic packaging per annum will not have to register to pay the tax
Guidance from government sources is, at time of writing, still in development. There are therefore many definitions and clarifications still to be given prior to the implementation date of 1st April 2022.
How do I avoid paying the tax?
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).
Is the 30% recycled content calculated on my entire pack (for example, if my plastic bottle contains 100% recycled content, but the matching plastic pump contains zero recycled content)?
The answer to this is not clear at the time of writing. Our analysts believe that it is more likely to be calculated on each individual piece of packaging manufactured or imported (meaning, 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, as we are still awaiting specific guidance and clarifications directly from government sources.
What part do Richmond play in all this?
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 please note that 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 links below: