Businesses involved in the use or manufacture of plastic packaging have been told they need to establish at what point the new Plastic Packaging Tax needs to be paid within their supply chains.

The tax was introduced on 1 April 2022 and applies to any business that manufactures or imports 10 tonnes or more per year of plastic packaging containing less than 30% recycled plastic.

Firms that meet these criteria will be taxed at £200 per tonne.

Final point of manufacture

Speaking on an IOE&IT webinar today (14 April) about the new tax, IOE&IT Academy trade and customs consultant Suzanne Alecrim advised that the tax only needs to be paid at the “final substantial point of manufacture”.

“We would be expecting a lot of people who are part of the plastic supply chain to be greatly or somewhat impacted,” she said.

“There has been a bit of a misunderstanding about the tax though”, she added. “We’ve heard people say that everyone in the supply chain must pay the tax. That’s not the case. You must establish where that final substantial point of manufacture is. That’s the only point that it does get paid.”

Impact

Of the 500 businesses attending the webinar, the majority of attendees said they would be impacted in some way by the tax, with 16% saying they will be “greatly impacted”.

Only 13% of the delegates said they had already registered on gov.uk to account for the tax, which only came into force two weeks ago.

Costly

Although there are exemptions to the tax, which Alecrim described in the webinar, the tax has been described as “difficult and costly” by experts including accountancy firm RSM.

The government has said that it has tried to keep exemptions to a minimum to encourage the greater use of recycled plastic.

“Food packaging makes up around 40% of packaging in the UK so excluding it from the tax would severely blunt its impact,” a government spokesperson said to the FT.