For the first time since its introduction in April 2022, the plastic packaging tax has increased from £200 per tonne of plastic packaging to £210.82 in-line with the Consumer Price Index (CPI). The CPI linked increase aims to ensure that the rax remains in-line with inflation and continues to reduce plastic waste. The new tax rate begins from 1st April 2023.
Plastic packaging tax was introduced as part of the UK government’s plan to reduce plastic waste and increase resource efficiency. The tax applies to plastic packaging with less than 30% recycled material, businesses who produce or import plastic packaging were obligated to pay £200 per tonne of plastic packaging. However, last month it was announced that the tax will increase to £210.82.
The increase in PPT is expected to have a positive impact in reducing plastic waste by further incentivising businesses to use more recycled plastic in their packaging as well as reducing the overall usage of plastic in packaging.
Despite some statistics suggesting that PPT was not having its desired effects regarding businesses registering under the tax, since July 2022 when the returns were first submitted, PPT has raised £206 million.
Some businesses have raised concerns over the transparency of where the money go once paid by obligated businesses due to the lack of hypothecation of funds. These concerns have been heightened by the raise in tax, as well as concerns that the increase could result in higher costs and reduced competitiveness. The government have stated that it will continue to work with the industry to ensure that the tax is implemented in a fair and effective manner.