On November 12, 2020, the British tax and Customs issued a draft legislation on plastic packaging tax. The new tax is applicable to plastic packaging produced in the UK or imported into the UK, which should contain at least 30% recycled plastics. It has been legislated in the finance act of 2021 and will be implemented on April 1, 2022.

The British Tax and Customs said that this new tax is to stimulate the increase in the level of recycling and collection of plastic waste, and to transfer it from landfills or incineration.

The main content of plastic packaging tax:

1. The tax rate for recycled plastic packaging less than 30% is 200 pounds per ton;

2. Enterprises that produce and/or import less than 10 tons of plastic packaging within 12 months will be exempted;

3. Determine the tax scope by defining the types of taxable products and the content that can be recycled;

4. Exemption for producers and importers of a small amount of plastic packaging;

5. Who is responsible for paying taxes needs to register with HMRC;

6. How to collect, recover and enforce taxes.

The tax will not be charged for plastic packaging in the following situations:

1. With 30% or more recycled plastic content;

2. Made of a variety of materials, the weight of plastic is not the heaviest by weight;

3. Production or import of human drugs for direct packaging license;

4. Used as transport packaging to import products to the UK;

5. Exported, filled or unfilled, unless it is used as transport packaging to export the product to the UK.

Who is responsible for paying taxes?

British plastic packaging manufacturers, plastic packaging importers, commercial customers of plastic packaging manufacturers and importers, and consumers who buy plastic packaging products in the UK.

Producers and importers of small amounts of plastic packaging will receive tax exemptions to reduce the administrative burden that is disproportionate to the tax payable.

Which plastic packaging is included?

Plastic packaging tax refers to plastic packaging based on weight. Plastic packaging tax does not apply to plastic packaging that contains at least 30% recycled plastic, or packaging that is not primarily plastic in weight. Regardless of whether the packaging is full or full, imported plastic packaging is taxable.

How to reduce or exempt export taxes?

The plastic packaging tax will affect British plastic packaging manufacturers, plastic packaging importers, commercial customers of plastic packaging manufacturers and importers, and consumers who purchase plastic packaging products in the UK. However, manufacturers and importers of small amounts of plastic packaging will be exempted.