Who is likely to be affected

UK manufacturers of plastic packaging, importers of plastic packaging, business customers of manufacturers and importers of plastic packaging, and consumers who buy plastic packaging or goods in plastic packaging in the UK.

To mitigate against disproportionate administrative burdens in comparison to the tax liability for those who are likely affected, there will be an exemption for manufacturers and importers of less than 10 tonnes of plastic packaging per year.

General description of the measure

This is a new tax that will apply to plastic packaging manufactured in, or imported into the UK, that does not contain at least 30% recycled plastic. Plastic packaging is packaging that is predominantly plastic by weight.

It will not apply to any plastic packaging which contains at least 30% recycled plastic, or any packaging which is not predominantly plastic by weight.

Imported plastic packaging will be liable to the tax, whether the packaging is unfilled or filled.

Policy objective

The aim of the tax is to provide a clear economic incentive for businesses to use recycled plastic in the manufacture of plastic packaging, which will create greater demand for this material. In turn this will stimulate increased levels of recycling and collection of plastic waste, diverting it away from landfill or incineration.

Background to the measure

At Budget 2017, the government announced a call for evidence into using the tax system or charges to tackle single-use plastic waste and received 162,000 responses.

At Budget 2018, a new tax on plastic packaging with less than 30% recycled plastic was announced. The government launched a consultation in February 2019 seeking input on the initial proposals for the design of the tax. A summary of responses was published in July 2019.

At Budget 2020, the government announced key decisions on the design of the tax, and HM Revenue & Customs (HMRC) launched a consultation on the more detailed design and implementation of the tax.

On 12 November 2020, the government published the draft primary legislation for technical consultation, alongside a summary of responses for the consultation held earlier in 2020. Feedback from the technical consultation was used to amend the primary legislation.

Primary legislation was included in Finance Bill 2021 and received Royal Assent 10 June 2021.

The tax information and impact note on the tax published on 3 March 2021 is superseded by this note.

Post time: May-26-2022