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.
***Updated Content 20th October 2021***
So will I have to pay the tax?
Not directly - 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.
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
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.
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 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.
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 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: