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Is Your UK Business Prepared For The Plastic Packaging Tax?

On the 1st of April 2022, the Plastic Packaging Tax (PPT) came into effect in the UK. Businesses manufacturing or importing significant amounts of plastic packaging are required to register and pay tax on it in an attempt to encourage more sustainable packaging options.

With world-leading measures and jurisdictions now in place, as well as 78% of respondents believing that steps need to be taken to reduce single-use plastic use (plastic waste pollution concerns in the UK 2021, Statista), it is more important than ever for businesses to make changes towards sustainable packaging.

What is the Plastic Packaging Tax (PPT)?

The Plastic Packaging Tax (PPT) came into effect on the 1st of April 2022. Statista statistics and facts on plastic waste in the UK suggest that “an estimated 4.9 million metric tons of plastics are placed on the market each year” in the UK, with 75% of this becoming waste. As the UK is such a significant contributor to the plastic waste problem, the government introduced measures to reduce plastic packaging waste.

The tax means that those who have manufactured or imported 10 or more tonnes of plastic packaging since the introduction of the tax will need to pay. Charged at £200 per tonne, it aims to discourage businesses from using anything less than 30% recycled plastic in their packaging.

Who does it affect?

Governmental guidance on the Plastic Packaging Tax states that there are primarily two different types of businesses that will be affected. You will need to register if you:

These broad definitions mean that many different types of businesses will be affected, including but not limited to retailers, manufacturers, transport providers, fresh feed producers, and publishers.

Does my business need to register for the Plastic Packaging Tax?

While the above summaries have helped a number of businesses establish whether or not they need to register for the Plastic Packaging Tax, others are left wondering. In those situations, the government suggests that you can contact your Customer Compliance Manager or use the online form to enquire about the Plastic Packaging Tax.

The below infographic may help you understand if your business is required to register for the tax or not. Alternatively, you can use the questions below. If you answer yes to any of the questions, you may be liable to pay the plastic packaging tax.

Which packaging is considered to be plastic?

Plastic is used in a variety of products and in different ways to package items. As plastic is everywhere, businesses where plastic is integral to their products may feel that they are at risk. However, certain types of plastics are exempt from the Plastic Packaging Tax.

What types of plastics are included in the PPT?

Bubble wrap, bin bags, drink bottles, sandwich bags and tape are some of the items businesses may use which means that they are required to pay the plastic tax.

What types of plastics are safe from the PPT?

Toolboxes, first aid boxes, glasses cases, CDs, DVDs, video game cases, water cartridge filters, printer cartridges, and inhalers are not products included in the PPT.

My business needs to register for the Plastic Packaging Tax - what now?

Once you have confirmed that you need to register for the PPT, you’ll need to ensure you complete due diligence and have everything you need ready to complete the paperwork. The more information you have, the easier it will be, especially if you set up systems to meet the new record-keeping requirements.

Calculate the weight of the packaging you manufacture or import

Once you have established that your business is liable to pay the tax, you will need to calculate the weight of the packaging that your manufacturer or import. This will affect just how much tax you pay, as PPT is charged at a rate of £200 per tonne of plastic.

Collect the relevant records and accounts

As a general rule, governmental guidelines suggest keeping records for at least 6 years from the end of the accounting period, with a clear record weight in tonnes, kilograms, and grams.

The accounts that you keep will provide a clear picture of how you have calculated the information for each entry on your quarterly tax return. By providing this detailed information, you’ll be able to get a more accurate picture. Accounts should include (information direct from GOV.UK:

Submit your Plastic Packaging Tax return

Once you have met the requirements of the PPT, you’ll need to submit a return to HMRC 4 times a year. These accounting periods are:

You will need to not only submit the return but also pay any tax due no later than the last working day of the month for the accounting period you are reporting. Weights must be given in kgs and rounded down to the nearest kg on your return.

GOV.UK explains what to include on your PPT return, making it easier for you to understand the requirements to complete the form effectively. They state that you will need to know and report total weights for any finished plastic packaging components if:

Failure to submit your tax return or pay in time means that you may be charged penalties, as well as interest on late payments.

How businesses can adapt to using less plastic

The aim of the PPT is to encourage businesses to use less single-use plastic packaging in their supply chain. With plastic packaging playing a significant role in the world economy, making the change is essential for businesses to move towards a more sustainable model. Thankfully, there are a few steps businesses can take to reduce the amount of plastic packaging used.

The first step is to identify the number of plastic packaging items you currently use. This will help you to identify any products that could be reused to help save costs and reduce the use of plastic.

Some packages require protection from the likes of bubble wrap, but you may find that recycled paper or shredded cardboard provides a good substitute for plastic and protects the products well. This will also help you to find a use for recycled paper.

Using third-party fulfilment services to minimise waste

Running an eCommerce business in this fast-paced world we live in comes with a number of challenges. It is difficult to adapt to industry demands when your space is limited, which is where services such as third-party fulfilment (3PL) can help.

Outsourcing to an eCommerce fulfilment provider means that you can help to minimise waste and scale your business. At Cloud9 Fulfilment, we offer professional-grade packaging chosen specifically for your product, and we will work with you to ensure that you are happy with the packaging. We have a range of custom packaging solutions to make your product stand out, with everything from designer packaging to plastic-free options.

The UK government is pushing for businesses to reduce the use of single-use plastic packaging wherever they can, and eCommerce fulfilment can help you in a number of ways. Contact Cloud9 Fulfilment today to discuss your business needs and learn how you can reduce plastic in your operations.