Posted: 30/07/2021

Fine food supply chain will be impacted by plastic tax

Fleur Lewis, head of food at accountancy firm Bishop Fleming, explains how the new plastic tax will work

Even though it’s unlikely that many independent retailers reading this will be directly liable to pay the incoming Plastic Packaging Tax, plenty of businesses in their supply chains will be.

So, it’s important for everyone to understand how this tax will work, especially if it results in costs being passed along the chain.

As proposed in the Finance Bill 2021 and set to take effect from 1st April 2022, the tax will apply to businesses in the UK that manufacture or import more than 10 tonnes of plastic packaging made with less than 30% recycled plastic. This includes importers of packaging which already contains goods, such as plastic bottles filled with drinks. It also applies to mixed material packaging where plastic is the dominant material.

The rate of tax will be £200 per metric tonne of packaging and is designed to encourage greater use of recycled rather than new plastic within packaging with the aim of waste away from landfill or incineration.

HMRC has issued guidance on getting ready for the tax for those who may be affected so that action can be taken well in advance of this measure coming into force.

Although details are still to be finalised, the main thing to note at this stage is that even businesses that manufacture or import less than 10 tonnes will need to register for the tax – regardless of whether you will have to pay any tax.

With this in mind, it’s a good idea for businesses of all sizes to keep records to show that they are below the tax threshold and to check that anything they are buying in has had the tax paid on it already.

To learn more about the tax visit gov.uk or bishopfleming.co.uk