Government release plastic packaging tax guidance

Two policy papers have been published by government to provide more clarity ahead of the tax launch in April 2022.

With less than a year before the plastic packaging tax goes live in April 2022, the two new guidance policy papers Get your business ready for the plastic packaging tax and Further information for businesses confirm much of what we already know. For instance, liable parties will have to register by 1 April 2022, and that records will have to be kept regardless of recycled plastic content or tonnage handled. That said, there are some useful confirmations outlined that could help businesses prepare.

For example, the guidance states the definition of a finished plastic packaging component is ‘when it has undergone its last substantial modification, even if waste or surplus material remains attached to it’. This gives a clearer indication of the tax point, and goes on to explain that any surplus material attached will not be taxable. 

Clarity on exemptions

There are five exemptions for the tax: plastic packaging that is manufactured for use as immediate medicinal packaging; transport packaging used on imported goods; packaging used as aircraft, ship, or rail stores; components that are permanently designated for use other than a packaging use; and exported packaging.

‘Transport packaging around imported goods’ has caused some confusion within industry, and without clear definitions could be somewhat subjective. Here the guidance tells us that it will be defined as “Packaging that is used to handle and transport a number of sales units or grouped packaging, to prevent physical handling and transport damage”. This could be interpreted as, for instance, pallet wrap around a crate of imported goods.

Accurate record keeping

Data work and keeping accurate records will be hugely important for compliance with the tax. Although the specifics are not yet totally clear, the guidance states that liable businesses should keep records that demonstrate:

  • The total amount in weight and a breakdown by weight of the materials used to manufacture plastic packaging, excluding packaging which is used to transport imported goods
  • The data and calculations used to determine if a packaging component is, for the most part, plastic and how much recycled plastic it contains
  • The weight of exempted plastic packaging and the reason for the exemption
  • The amount in weight of plastic packaging exported, and therefore the allowed relief from the tax

Clarity still needed

The publication of the new guidance does provide some answers, but there is still much clarity needed ahead of next year. The lack of definitive answers may be in part be due to the fact the tax is not yet a law – primary legislation is currently before parliament, with secondary legislation to follow, meaning time-frames are becoming increasingly tighter.

You can view the new guidance by clicking on these links: 

Dedicated plastic packaging tax support

We have developed services to support our members with the future requirements of the plastic packaging tax and are working with government and industry to seek further clarification on the mechanics and requirements of the tax. 

If you want to assess the impact of the plastic packaging tax on your organisation, please contact our team.

Louisa Goodfellow

Policy Manager

As Policy advisor Louisa provides key support to our team, including preparing reports on environmental policy issues and maintaining awareness of new developments. As such she will often be found coordinating responses to policy consultations, advocating policy positions and providing internal guidance to current legislation.

Written by Louisa Goodfellow Published 18/05/2021 Topics Packaging
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