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UK outlines plastic tax rules

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The UK government has issued further details of how it intends to reduce the use of virgin plastic in packaging. The headline move will be its Plastic Packaging Tax, first announced in March 2020.

A policy paper of 10 May from HM Revenue & Customs has now given more details. It confirms this will be levied at a rate of £200 (€233) per metric tonne of plastic packaging that contains less than 30% of recycled material. The charge will be applicable from April 2022. It will be levied on to any company that puts more than 10 tonnes of plastics on the market in a 12-month period, and applies to packaging produced for used in the UK, and imports – including imports of packaging already filled with goods.

Any company outside the UK that imports more than 10 tonnes for plastic packaging is liable to pay the tax if it cannot show this has an average of 30% recycled material. The tax will not be charged on packaging sent for export outside of the UK.

For food contact, the HM Revenue & Customs guidance states that ‘Packaging should only contain recycled content where it is permitted to do so under other regulations, such as those covering food safety.’ There are no exemptions for food packs however, the only products specifically out of scope are those for packaging medicines, or transit packaging.

In terms of scope, the tax will be applicable to conventional petroleum-derived polymers, and bioplastics – including biodegradable, compostable and oxo-degradable plastics. For multi-material packaging, a product will be considered in scope if plastics are the largest material type by weight. Thus a 10g composite pack, consisting of 4g of plastic, 3g of aluminium, and 3g of paperboard; would be considered a plastic pack for the purposes of the tax.

To demonstrate the volume of recycled material in a pack, authorities will require a manufacturer to calculate the proportion of recycled plastic for specific packaging types calculated as an average across a production run.

In terms of what meets the definition of recycled plastics, the UK government says that both mechanically or chemically recycled polymers will be acceptable.

As in other jurisdictions, there is liable to be an immediate pressure on suppliers, and hence prices for post-consumer resin (PCR) – especially recycled PET (rPET). Overall 39% for all UK household plastic packaging was recovered between April 2019 and April 2020 according to data from the industry trade group Recycling of Used Plastics (RECOUP). This does not equate to the volume of re-usable resin however, much will be rejected, and for use in food contact it must be processed in an approved facility. In terms of formats RECOUP confirms rigid plastics are better collected, 59% for bottles, and 33% for pots, tubs and trays; but recovery is as low as 7% for packaging films.

An extra burden for business will be additional record-keeping obligations. They will, for example, need to keep details of ‘the total amount in weight and a breakdown by weight of the materials used to manufacture plastic packaging.’ Furthermore, manufacturers or importers responsible for accounting subject to the tax will need to include a statement confirming that the Plastic Packaging Tax has been paid on their invoices to business customers.

Companies that will be subject to the tax are recommended to register with the UK tax authority before the April 2022 deadline.

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*Article originally published in Smithers' Food Contact World.