A guide to Plastic Packaging Tax

A guide to the Plastic Packaging Tax

Running a business in 2022 isn’t easy. Customers expect a lot. Competition is fierce. And the responsibilities are huge – not least the need to ‘go green’.

Many businesses have already taken steps to reduce their environmental impact. This year, the government is also taking new steps to create a more sustainable business landscape with its new Plastic Packaging Tax (PPT).

This tax is estimated to impact around 20,000 manufacturers and importers of plastic packaging, and will have a significant impact on supply chains. The PPT goes far wider than you’d expect, and there have already been warnings that some businesses could be caught out by the changes.

Our guide to the PPT is here to make sure yours isn’t one of them. Find out what the tax entails, what it means for your business and why embedding more sustainable practises into your organisation is the way forward.

What is the PPT?

If you want less of something, tax it. This tried-and-test principle has been applied to cigarettes, alcohol, and is now being applied to plastics as well.

The PPT is the UK’s newest environmental tax. Set to come into force on 1 April 2022, it applies to any plastic packaging component that has been manufactured in (or imported into) the UK that does not contain at least 30% recycled plastic.

What products will be affected?

According to the government website, the tax applies to finished plastic packaging components. So, what does that mean exactly? A packaging component is a product designed to be suitable for use in the supply chain or by consumers – either alone or alongside other products.

That means it should do one of the following:

  • Contain goods
  • Protect goods
  • Handle goods
  • Present goods
  • Deliver goods

Examples of packaging components include food trays, drinks bottles, coat hangers and reusable and refillable items such as plastic crates. Some items of plastic packaging will be exempt from the tax, for example:

  • Those primarily designed for long-term storage by consumers, such as glasses cases, DVD cases, toolboxes and first aid kits
  • Those designed to be an integral part of the goods sold, such as printer cartridges, tea bags and inhalers
  • Those designed to be reused in the presentation of goods, such as reusable sales display shelves

Find out more about what products will be affected by the Plastic Packaging Tax – and what products will not.

How much is the tax and who has to pay?

The rate of tax will be £200 per tonne payable on all plastic packaging containing less than 30% recycled plastic content. Businesses that are affected will also have to pay additional costs including registration with HMRC, staff training, filing tax returns and storing records.

Where chargeable plastic packaging is manufactured in the UK, the tax will be paid by the manufacturer. Where it is imported into the UK, it will be paid by the person on whose behalf it is imported.

What is the aim of the tax?

The aim of the tax is to encourage businesses to think about their impact on the environment. From being mindful of the materials they use and recycling habits, to the ratio of recycled material used when producing plastic packaging, sustainability is more than just good intentions.

It is estimated that the tax could see a 40% increase in the use of recycled plastic in packaging. That is equivalent to a carbon saving of nearly 200,000 tonnes between 1 April 2022 and 1 April 2023.

Time will tell whether this tax will encourage more recycling or become a burden on businesses who’d rather just pay up.

However, one thing is clear: businesses offering sustainable packaging options will be seen as a more appealing choice for today’s increasingly environmentally-conscious consumers.

How can Delta help?

No one likes paying taxes. But when the aim of a tax aligns with your business’ sustainability strategy, the results could save money and the environment.

Delta Collaborate (part of the Delta Net Zero initiative) is focused on innovation and partnerships for sustainability and economic growth. Thanks to this strategy, we are able to support our clients’ goals and objectives and deliver real change.

Here at the Delta Group, we have an array of sustainable alternatives to the traditional single-use plastic packaging materials. We offer innovative solutions to all of our customers, to help address their environmental needs.

Through our integrated, newly implemented Carbon Calculator, we are able to track, monitor and report a detailed Product lifecycle Assessment of the emissions used for your print, including the total carbon footprint of your packaging. Additionally, our talented purchasing team can advise all clients of the most sustainable solutions available on the market, helping to reduce the use of single-use plastics.

Are you ready to adopt more sustainable ways of doing business? Get in touch with the team today: hello@thedeltagroup.com.