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The New Green Plastic Packaging Tax

Plastic Packaging Tax

From April 2022, the UK government is set to introduce a new tax on plastic packaging. If you manufacture or import plastic packaging into the UK, it needs to contain at least 30% recycled plastic. Otherwise, you’ll be subject to a tax of £200 per tonne. This tax will apply if you manufacture or import more than 10 tonnes of plastic packaging during any 12 month period.

Plastic packaging tax

Who has to register for this tax?

If, within the 12 months prior to April 1st 2022, you’ve manufactured or imported 10 or more tonnes of finished plastic packaging components containing less than 30% recycled plastic, then you need to register for this new tax. You can find out more about whether you need to register by checking out this website.

Is anyone exempt from paying the new Green tax?

Every company that imports or manufactures plastic with less than 30% recycled plastic must pay the tax. However, if your company exports the plastic you’ve manufactured or imported, then you’re entitled to defer or claim back the tax for up to 2 years from the date of manufacture or import.

How does my company register for this new tax?

When you register for the Tax on Plastic, you’ll need to provide the following –

  • The nature of your business
  • Your businesses address and contact details
  • The date your business became liable for Plastic Packaging Tax
  • An estimate of how much finished plastic packaging you expect to manufacture or import in the next 12 months
  • A customer reference number, which could be your:
    • Corporation Tax Unique Tax Reference
    • Self Assessment Unique Tax Reference
    • Company Reference number
    • Charity Registration number
    • National Insurance number
    • Temporary National Insurance number

You must then submit your return quarterly. Your tax will be due for payment no later than the last working day of the month following the end of the accounting period being reported.

Will other businesses be impacted by the new tax?

Of course, the new tax directly impacts the producers and suppliers of plastic packaging. However, end-users are likely to feel the effects of the policy too. After all, there’s every chance that the tax will have to be passed on don the supply chain to the customers of the packaging supplier, to their customers, right down to the end-user.

How should I respond to the new tax?

Virgin, unrecyclable plastic is expensive for the environment. It’s also expensive, in the long run, for business. In most cases, there are other options available. Furthermore, recycled alternatives can offer better all-around value. If you are currently using virgin plastic in your protective packaging, it might be worth exploring recycled alternatives before the new green tax starts to bite. As well as the cost savings, sustainable materials can benefit your business in numerous other ways. Examples include enhancing the customer experience or improving your environmental performance. Increasingly, consumers factor environmental impact into their purchasing decisions. That’s why switching to recycled packing materials may well elevate your brand in the eyes of your customers.

What’s the purpose of the new green tax?

The goal of the policy is to motivate businesses to use more recycled materials in their plastic packaging. The carbon footprint of recycled plastic can be as much as four times lower than that of virgin plastic. As demand increases for recycled materials, levels of plastic collection and recycling are expected to rise. The result? Plastic will increasingly be diverted away from landfill and incineration.

Ask the tax experts

The Green Tax on Plastic packaging will inevitably add costs to many businesses. Here at AccountsCo, we’re UK Tax Specialists – here to help. So for expert guidance on all tax matters, get in touch.

Plastic Packaging Tax From April 2022, the UK government is set to introduce a new tax on plastic packaging. If you manufacture or import plastic packaging into the UK, it needs to contain at least 30% recycled plastic. Otherwise, you’ll be subject to a tax of £200 per tonne. This tax will apply if you […]

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