The HMRC has issued further guidance to help businesses prepare for the plastic packaging tax (PPT) that will be in place from April 1, 2022.
The PPT will be a tax on packaging containing less than 30% chemically or mechanically recycled plastic, and will also be taxable for bioplastics, biodegradable, compostable and oxo-degradable plastics.
All companies that manufacture or import 10 tons or more of plastic packaging in a 12-month period must register for the TPP, even if their packaging contains the defined amount of recycled plastic or is exempt from the tax for others. reasons. The report provides details on which companies must notify their registration obligation by April 30, 2022, and more information on how to do so will be available later in the year.
The tax will also be payable for packaging composed of several materials when the packaging contains a greater proportion of plastic than the other materials. In this case, all of the packaging will be weighed as plastic and will be taxable as such.
Packaging manufactured or imported into the UK will be subject to tax at the rate of £ 200 per metric tonne of plastic packaging. This will include items such as drinks in plastic bottles when the imported goods are in plastic packaging.
Tax will be charged for a finished product that has “undergone its last substantial modification” such as extrusion, molding, forming or printing. If a company is located in the UK, it will be responsible for the TPP if it makes the ‘last substantial change before the packing or filling process’.
The company that packs or fills the parcels will only be responsible for the PPT if it “also commits to[s] a substantial modification before packaging of the filling process ”. Importers will also be responsible for the TPP if the packaging they are importing has undergone its last substantial change.
According to the guidance, the PPT will be levied on products “designed to be used, alone or in combination with other products, in the containment, protection, handling, delivery or presentation of goods at any stage. of the supply chain of the goods, from the producer of the goods to the consumer or user ”.
Plastic food trays, films used to protect products, reusable plastic crates, plastic transport bags and disposable cups are all taxable packaging items. But even plastic packaging that does not meet the definition provided but that is designed as single-use consumer packaging will be taxable.
The packaging components that are not subject to the PPT are divided into three categories. First, products where the packaging is not the primary purpose of the product, but rather is there to store the good. This exemption includes items such as tool boxes, headphone cases and first aid boxes.
The second category of products exempt from the tax are products such as inhalers and air fresheners, where packaging is an essential aspect of the product that will be used by the consumer. Finally, the third category includes products such as store fittings and sales displays, which are created specifically to present the products to consumers and will be reused for this purpose.
Plastic packaging that is used for the transport of imported goods, used in aeronautical, maritime and rail merchandise stores, used to package medicines or having a permanent use other than packaging will also be exempt from the tax. However, all types of exempt packaging must be taken into account when calculating compliance with the 10 tonne threshold. If the packaging is for export and is exported within 12 months, then it is exempt from tax.
All manufacturers and importers of plastic packaging should keep records of the packaging they manufacture or import so that they can know and prove whether or not they have to declare that they are subject to the tax.