New UK plastic packaging tax & how it could affect your business



In just a few days, the UK government will introduce a brand new tax on plastic packaging for British businesses to help combat the environmental impact of plastic waste. The new legislation will come into effect on 1st April 2022 to incentivise companies to use recycled plastic in their products and packaging, encourage greater levels of collection and recycling, and reduce the amount of plastic that ends up in landfills or incineration.

The introduction of the new plastic packaging tax coincides with plans for a global treaty to tackle plastic pollution, with over 200 countries agreeing to sign up to the pact, which aims to set rules for the production, use and disposal of plastics by 2024 to address the adverse effects which discarded plastic is having on the environment.

Why is plastic packaging such a problem?

Each year, over 400 million tonnes of plastic is produced, with almost 50% being single-use plastic which can only be used once before it's thrown away. 

It is estimated that more than five trillion pieces of plastic are currently in the world's oceans, and it can take many years to break down. Around 12.7 million tonnes of it enters the water each year.

Discarded plastic packaging can destroy habitats, harm wildlife and contaminate the food chain. There can be a significant impact for people living in low-income communities near rivers, shorelines, or plastic production and plastic waste sites. These people are exposed to greater litter, toxins, and waste.

As businesses increasingly look for ways to be more socially responsible and are encouraged to report on ESG, using more recycled plastic will reduce their tax bill and improve their green credentials, helping to attract investors.

How does the new Tax work?

The Plastic Packaging Tax will apply to all plastic packaging manufactured in or imported into the UK that does not contain at least 30% recycled plastic and will be charged at £200/tonne.

The tax will affect many businesses, including pharmaceuticals and food and drinks manufacturers, with consequences for both consumer products and industrial applications. However, to reduce the financial and administrative burden on small businesses, there will be an exemption for manufacturers and importers of less than 10 tonnes of plastic packaging per year.

Does your business have to register?

The simple answer is yes! Registration will be required for all businesses who produce or import plastic packaging, even if they already use at least 30% recycled plastic and do not need to pay any tax.

Many organisations affected by the new tax, either directly or within their supply chains, have already started to prepare themselves to ensure that they are compliant by the time the tax is brought into law. Companies are either changing the amount of recycled plastic they use to avoid charges or if they must pay, they are ensuring that they have registered correctly and assessed the cost implications for their business and if they may have to pass any costs on to their clients.

How else could business be affected?

With the environment now moving towards the top of government and business agendas, companies will have to focus on becoming more eco-friendly in various ways, including plastic packaging production, energy consumption, carbon footprint, and supply chain ethics. This could see growth in the market for several employment areas, including green tech jobs, compliance and governance, and the potential for dedicated finance roles for continual assessment and monitoring of the impact of new regulations, such as the Plastic Packaging Tax, on their business.

We hope that this article provides some helpful information about the new Plastic Packaging Tax. If you're looking for your next career move in Green Tech, Compliance, Governance, or any other sectors that we specialise in, talk to our expert recruiters at McGreggor Boyall today and find out how we can help.