The Government is currently consulting on the design of a new tax on the production and import of plastic packaging which contains less than 30% recycled content. The aim of the tax is to make plastic packaging a more cost effective option than new plastic.
It is proposed that the tax will be introduced before April 2022 and will be charged, at the moment the packaging is “made available for use or onward sale”. Plastic packaging containing at least 30% recycled material will be exempt from the tax.
If packaging manufactured by a different company than the one filling the packaging with goods, the manufacturer is the one who will have to pay the tax.
For imported packaging or packing materials, the tax will be charged as soon as the packaging hits the UK market. To ensure UK manufacturers are not disadvantaged in foreign markets, an export tax credit system is proposed, where businesses that manufacture and export will be credited if the tax has already been paid.
A “joint and several” basis will be applied to other businesses in supply chain. This means that the tax would be charged on businesses that knew or had reasonable grounds to suspect the tax had not been accounted for.
For small manufacturers, there will be a de minimus threshold, for those considered too small to have a material impact on demand for recycled plastic.
The Consultation Closes on Sunday 12th May 2019
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