A brand new tax on plastic packaging will be introduced in the UK with effect from 1 April 2022. The aim of the tax is to incentivise the use of recycled material in the production of plastic packaging.
The draft primary legislation (which was introduced in the Finance Bill 2021) provides that the tax will apply at a rate of £200/tonne on plastic packaging with less than 30% recycled plastic manufactured or imported into the UK (including packaging on goods which are imported).
The tax will affect a very wide range of businesses due to its broad scope. Crucially, registration for PPT will be required even if a business meets the 30% recycled content threshold and does not need to pay any tax. Impacted businesses therefore need to be aware of and start preparing to meet their compliance obligations well in advance of 1 April 2022 and many are already doing so.
The EU introduced a plastic packaging levy on Member States (not businesses) at a rate of €800/tonne on 1 January 2021 based on the amount of plastic packaging placed on their own markets. We expect that this will encourage Member States to speed up their own development and introduction of plastic taxes to fund their liability to the EU. It may also prompt existing proposals to be reviewed and adjusted to match the proposed EU rate.
Italy is introducing a tax of €450 per tonne on virgin plastic used in manufacture or importation of single use which has been deferred to 1 January 2022.
