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Budget 2020 Announced – Plastic Tax Consultation Launch

11th March 2020

Martin Hyde

Today’s (11 March 2020) budget announcement from the government brought with it a number of spending and taxation commitments for environmental purposes

These include removing Red Diesel tax breaks, investing significant funds into a “nature for climate fund”, allocating an additional £10m to support the design and delivery of net-zero policies / programmes and a brief update on the upcoming “plastic packaging tax”.

Plastic Packaging Tax

Today’s key announcement for the packaging industry was the confirmation of a £200 per tonne value for the upcoming tax on plastic packaging with less than 30% recycled content. Whilst this does fall within the expected range of values for the tax, it highlights the government’s intentions to encourage recycled content through the “stick” method over the “carrot”.

What has changed?

  • Inclusion of imported finished products (previously only UK manufactured or empty imported packaging were impacted)
  • Introduction of a “De Minimis” threshold to enable businesses handling less than 10 tonnes of plastic packaging per year to be exempt

Furthermore, there is no mention of a potential modular system with different charges for food contact and non-food contact material. Previous industry concerns highlighted that increasing recycled content in food grade material may be more difficult.

The Plastic Packaging Tax is now under secondary consultation which runs until the 20 August 2020 (extended from 20 May due to many sectors with an interest in this policy being affected by COVID-19). We will be engaging with members to ensure their views are encapsulated in our own response as well as assisting members to respond directly.

You can read the full consultation details on the government website HERE

Who does the plastic packaging tax impact?

In short, anyone who uses, handles or purchases items in plastic packaging in the UK will be impacted by this tax in one way or another.

Parties likely to pay the Tax directly:

  • Importers of plastic packaging into the UK (either empty or around product) with less than 30% recycled content
  • Manufacturers of plastic packaging in the UK with less than 30% recycled content

Parties who may pick up costs relating to the tax indirectly (through trickle down costs from suppliers):

  • Businesses purchasing empty packaging or finished products in packaging with less than 30% recycled content
  • Consumers purchasing items contained in packaging with less than 30% recycled content

If you think this may impact you, please register for our upcoming webinar on Tuesday 24 March at 10am – click here to register your free place

Alternatively, please feel free to contact our Policy Team on 01756 706577 or at consultation@complydirect.com