Plastic Packaging Tax: initial guidance released

With less than a year before April 2022 when the plastic packaging tax is set to go live, HMRC have released initial guidance policy papers; get your business ready for the plastic packaging tax and further information for businesses.

This confirms much of what we already know, for instance liable producers will have to register by 1st April 2022 and records must be kept even if a business does not need to register for the tax. There are some further clarifications within the guidance, including the definition of a finished packaging component which gives a clearer indication of the tax point. It states that “this is when it has undergone its last substantial modification, even if waste or surplus materials remains attached to it”, adding that any attached surplus material is not taxable.

Exemptions and deferrals

The guidance also gives further clarity on exemptions stating that there are 4 exemptions as follows:

  • plastic packaging manufactured or imported for use in the immediate packaging of a medicinal product
  • transport packaging used on imported goods
  • packaging used as aircraft, ship and rail stores
  • components that are permanently designated or set aside for use other than a packaging use

In addition to the exemptions above there is also a deferral of liability for plastic packaging which is exported that meets the direct export condition – further guidance on the criteria that will need to be met to satisfy the direct export condition will be published later in the year.

Data and record keeping

Unfortunately, there is no new information or specifics on record keeping, despite the importance of accurate data records to evidence compliance with the tax. The guidance confirm that records must be kept even if a business does not need to register for the tax or is handling plastic packaging which is exempt or relieved from the tax, so it can be demonstrated to HMRC. In terms of imports, details of the plastic packaging’s composition must be obtained from the overseas manufacturer by the liable business in the UK, e.g. the importer.

Records must show:

  • 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.
Further guidance will be eagerly awaited

Despite this guidance clarity is still needed for certain aspects and timelines are becoming increasingly tighter with the tax not yet in law. The Government have confirmed that until the primary and secondary legislation become law, the contents of these policy papers are subject to change. The primary legislation is currently before parliament with secondary legislation to be introduced later this year. We continue to liaise with Government, industry, and producers to clarify the specific mechanics and requirements of the tax.

Our team are working with members to support their needs in relation to the future requirements of the plastic packaging tax. To assess the impact of the plastic packaging tax on your business and find out more about how our team can help, contact us today.

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