Plastic Packaging Tax

A £200 a tonne tax on plastic packaging containing less than 30% recycled content will come into force in April 2022, if the government’s commitments in the Budget 2020 come to fruition.

Chancellor Rishi Sunak announced in his first budget that the move would help tackle the “scourge” of plastics pollution and boost the use of recycle plastics by 40%.

The tax was first put forward in the government’s Resources and Waste Strategy, and it’s hoped it will boost the market for recycled content.

Alongside this commitment in the budget, the Treasury announced £700,000 to develop IT capability to administer the future Extended Producer Responsibility scheme for packaging.

The tax was consulted on last year where the government outlined its preferred option of a 30% minimum content rate, and suggested a £150 a tonne level may be appropriate.

Another consultation on the tax was launched soon after the budget was announced, and it’s thought plans to exclude imported filled packaging from the tax will be dropped amid fears that packaging production would be offshored.

The budget document said: “The government will keep the level of the rate and threshold under review to ensure that the tax remains effective in increasing the use of recycled plastic.


“The government will also extend the scope of the tax to the importation of filled plastic packaging and apply a minimum threshold of 10 tonnes of plastic packaging to ensure the smallest businesses are not disproportionately impacted.”


The ten week consultation will run until May* and will cover the detailed design and implementation of the tax. You can have your say on it here.

Other factors in the budget which could impact the sector include plans to freeze the aggregates levy in 2020-21, and the government said it would be publishing a summary of responses and government next steps to last year’s comprehensive review of the levy.

A £2 million fund for a digital waste tracking system to provide better data on waste transport was also included in the budget, “to improve evidence on where fly-tipping happens and the best ways to deter it.”

 

* Update * Please note that yesterday (28 April) an extended closing date of 20th August (11:45pm) was announced for the Plastic Packaging Tax Consultation originally set to close on 20th May. Government recognises that many sectors with an interest in this policy are affected by COVID-19 and want to give all stakeholders time to submit their views, hence extending the consultation. Nevertheless, early responses are encouraged where possible to support the ongoing consideration of this policy.

 

View the Plastic Packaging Tax Consultation Document
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