Do You Need To Register For Plastic Packaging Tax?
If you manufacture or import plastic packaging, you may be required to register for the Plastic Packaging Tax.
What is the tax?
If you manufacture or import at least 10 tonnes (over a 12-month period or in the next 30 days) of plastic that contains less than 30% recycled plastic, you are required to pay the tax.
The packaging should only contain recycled plastic where it is permitted under other regulations and food safety standards.
Packaging that is designed to be suitable for use in the supply chain and single-use consumer packaging are liable for the tax. Find out more about what packaging is subject to the tax here.
Who must register?
In addition to the above, you must also register if you are a non-resident taxpayer who imports finished plastic packaging into the UK on your own behalf or manufactures finished plastic packaging in the UK.
Who is not liable?
If your plastic packaging contains more than 30% recycled plastic, you will not be liable for the tax, but you should still keep a record of it so you can prove you are not liable for the tax.
What about partnerships or unincorporated bodies?
You should still register if at least one person carrying out business has manufactured or imported 10 tonnes or more of finished plastic packaging components during the 12 month period or will do so in the next 30 days.
When does the tax come into force?
The Plastic Packaging Tax comes into force on the 1st April 2022.
How much is it?
The tax will be charged at £200 per tonne of packaging that contains less than 30% recycled plastic.
When must you register?
You must register for the Plastic Packaging Tax within 30 days of becoming liable to do so.
What is considered ‘plastic packaging’?
In the context of the Plastic Packaging Tax, plastic is considered a polymer material that may have had additives or substances added to it. It does not include cellulose-based polymers, which have not been chemically modified.
When assessing the amount of plastic in your packaging component, the additives are classified as part of the plastic.
If the packaging is made from multiple materials but contains more plastic by weight than any other substance, is it classed as plastic packaging for the purpose of the tax.
You will need to keep records of what substances are in your plastic packaging.
You can check what is considered a finished plastic packaging component here.
What is considered ‘Recycled plastic’?
Plastic that has been reprocessed from recovered material by using chemical or manufacturing processes and can be used for its original or another purpose is considered recycled.
Check what is considered ‘recycled plastic’ here.
How do you register?
To register, you must provide your business type, address, and contact details; the date your business became liable for Plastic Packaging tax; an estimate of how much finished plastic packaging you expect to import or manufacture in the next 12 months; and a customer reference number, which could be a Corporation Tax Unique Tax Reference, Self Assessment Unique Tax Reference, Charity Registration number, or National Insurance number.
You will then be given a reference number.
Can you charge more VAT?
If you pay Plastic Packaging Tax you may choose to increase the price you charge for that packaging to help cover the cost of the tax. This is a decision for you to make yourself within your business. If you increase the price of the plastic packaging, VAT will be payable on the whole of the new price.
The government recommends you make the tax you pay towards the Plastic Packaging Tax visible to your business customers and try to work with them to increase the amount of recycled plastic they use.
More information about including a Plastic Packaging Tax statement with invoices will be published in due course. This is the latest guidance from the government, but until all of the legislation is approved, it is subject to change.
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