Think your business can ignore the plastic packaging tax deadline? Think again!

The UK government’s new plastic packaging tax (PPT), intended to combat the use of single-use plastic and encourage greater reliance on recycled plastics, will come into force on 1 April 2022. A quick look at supermarket shelves suggests that some businesses are coming to grips with this while others are not.

Manufacturers and importers of plastic packaging products will be required to pay PPT at £200 per tonne on ‘chargeable plastic packaging components’ that fall within the scope of the new tax.

As plastic packaging is used in a wide range of sectors, many businesses are likely to be impacted. Just some of these businesses include:

• retailers – importing products such as bin liners, water/fizzy drink bottles and carrier bags;
• manufacturers – manufacturing or importing plastic packaging materials or components;
• publishers – importing plastic materials used for laminating books or applying plastic sleeves to magazines;
• freight transport providers – importing plastic packaging materials for transportation eg bubble wrap; and fresh food producers – importing plastic packaging to seal and extend the shelf-life of their products.

The registration threshold

Organisations must register for PPT if they have manufactured or imported 10 tonnes or more of finished plastic packaging components within the last 12 months, or will exceed that threshold in the next 30 days.

It is important to note that the 12-month ‘look back’ test only applies to plastic packaging products that were produced or imported after 1 April 2022 – items prior to this are not included in the turnover calculation. However, every business that manufactures or imports potentially taxable products will have to start keeping records of these from 1 April 2022, when the online portal for registration applications opens.

Applicants must give HMRC an estimate of the expected tonnage of finished plastic packaging components they expect to produce or import over the following 12 months when first registering.

Anomalies within HMRC guidance

Businesses are currently facing difficulties because the examples of products given in HMRC’s guidance are not exhaustive. In the absence of complete guidance, businesses have to make reasonable judgements about products that could be akin to those described in the guidance. For example, the guidance includes glasses cases as excluded items because they are intended for the long-term storage of glasses. However, there is no mention of contact lenses cases, which have the same function for a similar product.

With such anomalies coming to light at this late stage, PPT may prove an even bigger headache for manufacturers and importers to implement than was first thought. Businesses must act quickly to review the products they import/manufacture to determine which will fall within the scope of PPT.