The UK Government has today (12 Nov) published draft legislation for its impending plastics tax, along with a summary of responses to its consultation.
The Plastic Packaging Tax, which was proposed by government in 2017, will apply from April 2022 to plastic packaging manufactured in, or imported into, the UK which contains less than 30% recycled plastic.
The tax will seek to provide a ‘clear economic incentive’ for businesses to use recycled material in the production of plastic packaging, which will create greater demand for this material.
In turn, it’s hoped this will stimulate increased levels of recycling and collection of plastic waste, diverting it away from landfill or incineration.
While the tax continues to represent a blunt instrument, due to the lack of hypothecation of revenues towards the development of recycling, the simplicity of definitions make clear how it can be avoided through the inclusion of recycled content
During the Budget in March 2020, the Government announced some of the main decisions it had taken in the design of the plastics tax, which were informed by a previous public consultation.
The consultation, which seeks feedback on some of the finer details of the tax, closed last week and a summary of responses has now been published.
A total of 291 written responses were received and government says the responses agreed with the majority of the proposals while raising important points about some areas of the design.
The government’s detailed response is set out here, taking on board stakeholder feedback and setting out how this has shaped the tax design.
Government has also published a draft of the legislation for technical consultation which sets out the key features of the tax, including:
- the £200 per tonne tax rate for packaging with less than 30% recycled plastic
- the registration threshold of 10 tonnes of plastic packaging produced in or imported into the UK per annum
- the scope of the tax by definition of the type of taxable product and recycled content
- the exemption for producers and importers of small quantities of plastic packaging
- who will be liable to pay the tax and need to register with HMRC
- how the tax will be collected, recovered and enforced
- how the tax will be relieved on exports
Robbie Staniforth, Head of policy, Ecosurety, comments: “Today’s announcement provides further clarity and certainly for the recycling sector. The mere threat of this legislation over the past few years has already stimulated market development for recycled plastics.
“It is now not just fashionable to include recycled content in packaging but an imperative. Many plastic packaging producers have already advanced their plans and relationships with the resource sector and this draft legislation is only likely to increase the level of cross-sector engagement.
“While the tax continues to represent a blunt instrument, due to the lack of hypothecation of revenues towards the development of recycling, the simplicity of definitions make clear how it can be avoided through the inclusion of recycled content.
“Collaboration, innovation and infrastructure will doubtlessly be needed if environmental outcomes are to be improved, whether it be de-packaging, the advancement of reusable packaging or the holy grail of film to film plastics recycling.”