With only one month to prepare, here we list the essential steps that businesses should look at now, whether you are an importer, manufacturer or need to ensure due diligence in your supply chain.
Familiarise yourself with the basics of Plastic Packaging Tax
Once introduced, the Plastic Packaging Tax (PPT) will require businesses who are importing or manufacturing to register and report the plastic packaging placed onto the UK market. Obligated businesses will be required to pay £200 per tonne of plastic packaging placed on the market that does not contain 30% recycled content.
Understand if you need to register from the 1 April 2022
Businesses that import or manufacture more than 10 tonnes of plastic packaging will need to register with HMRC from 1 April 2022.
It is important that you understand this is NOT if you place more than 10 tonnes of liable packaging onto the UK market, it is all plastic packaging except for:
– Transport packaging on imported goods.
– Plastic packaging used in aircraft, ship and rail goods stores.
Coordinate with your finance/accounting team
As this is a tax and it is run by HMRC, you will probably already have the information to log in from 1 April with whoever manages the other aspects of tax in your business.
If you believe you need to register, you should book in a meeting with whoever accesses your other HMRC services on April 1. This will allow you access to understand the information you will need to provide on registering. If this information isn’t immediately available, ensure you gather and submit this as soon as possible.
Make a note of the quarterly accounting periods
The accounting periods for Plastic Packaging Tax are:
1 April – 30 June
1 July – 30 September
1 October – 31 December
1 January – 31 March
Businesses should set up a system to ensure data is submitted and payment is made no later than the last working day of the month following the end of the accounting period being reported.
Revisit supply chain processes and procedures
If you are a business that will be looking at complex supply chains, with potential for multiple stages of modification, potential for exports or multi-material packaging, then you should have procedures in place to:
– Know where the tax point falls.
– Ensure you have all supporting documents shared between suppliers, where needed.
– Have a list of due diligence measures to support submission.
– Have a clear filing system for supporting documents that will be saved and kept for 6 years.
Due diligence measures
Even if your business is not the tax point for the plastic packaging, it is important to keep in mind that should you suspect a supplier should be compliant but isn’t, you should raise that query with them. If you suspect a supplier is avoiding the Plastic Packaging Tax, you should talk to HMRC, as you could be found to be jointly and severely liable for tax evasion.
Communication with Customers
We understand businesses are facing some of the most challenging times, with many price changes being felt through the supply chain. If you cannot absorb the tax within the business and believe it will be passed on to your consumers, you should look at clear communication wherever possible.
Consumers are more aware of the environmental impact of packaging than ever before. Consider the opportunities for you to share information with your customers about how to ensure packaging is collected and recycled. Or detail about why recycled content is not appropriate for your plastic packaging – perhaps because of food safety – but you have made moves to ensure it is made of plastic that can be collected for recycling at kerbside.
What will the Plastic Tax cost my business?
The government has set a rate of £200 per tonne on plastic packaging placed onto the UK market that has less than 30% recycled plastic content. This rate will be subject to review to ensure that the tax remains effective in increasing the use of recycled plastic.
The costs to each business will vary. We can provide an impact assessment of the Plastic Packaging Tax on those businesses affected which will help you prepare for the changes ahead. Fill in our contact form to talk to us about getting a forecast of your costs, or if you have any questions or concerns about what the tax means for your business.
You can calculate your estimated liability for the Plastic Packaging Tax on our online calculator.