The Chancellor provided updated details of the proposed plastic packaging tax in the Budget, which have been amended in response to an earlier consultation and will now be subject to a further review
Plastic packaging tax will apply at a rate of £200 per tonne of plastic packaging which does not contain at least 30% recycled plastic. This will apply to plastic packaging which has been manufactured in, or imported into, the UK.
The government says it will keep the rate of the tax and the 30% recycled plastic threshold under review to ensure that the tax remains effective in increasing the use of recycled plastic.
At Budget 2020, in response to feedback from the previous consultation, the government announced that it will extend the scope of the tax to imported filled plastic packaging that does not contain at least 30% recycled plastic content, rather than just imports of unfilled plastic packaging.
There will be an exemption for businesses that manufacture or import less than 10 tonnes of plastic packaging in a 12-month period from the requirement to pay the tax. This will ensure the administrative burden and cost of collecting the tax are not disproportionate to the environmental harms the tax seeks to address.
The Treasury said the tax will complement the reformed packaging producer responsibility regulations.
These reforms will encourage businesses to design and use plastic packaging that is easier to recycle and discourage the creation of plastic packaging which is difficult to recycle. They will also make businesses responsible for the cost of managing the packaging they place on the market when it becomes waste.
The government says that tax and regulatory reform together will provide businesses with the right incentives to recognise the impact of their plastic packaging decisions and drive the development and use of more sustainable packaging.
The tax and regulatory changes will be delivered as separate measures given the high level of complexity any combined system would bring. However, the government will continue to ensure that the tax complements the reformed packaging regulations.
There will now be a consultation on the detailed design, implementation and administration of plastic packaging tax to ensure meets environmental objectives while placing only proportionate burdens on business.
This includes questions on the scope of the tax; liability; excluding small operators; evidence requirements; exports; and the processes for registration, returns and enforcement. The rate of the tax and the percentage of recycled content are not within the scope of this consultation.
The consultation closes on 20 May.
