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The Wrap on Plastic Packaging Tax

Plastic Packaging Tax is a lever to start the Circular Economy, a system that will divert recycled plastic into packaging and away from the landfill or the incinerator, according to the government.

The tax applies to plastic packaging which comprises less than 30% recycled material. In addition, businesses that import 10 tonnes or more of plastic packaging per year are liable for duty of £200 per tonne and must register for Plastic Packaging Tax, even if their packaging comprises more than 30% recycled plastic.

There are two main types of taxable plastic packaging. One: those used in the supply chain that runs from the manufacturer of the good to the user or consumer. If the packing contains, protects, handles, delivers or presents the goods, it is taxable. It does not matter if it is used in the supply chain or by the end user. Two: plastics with a single use, to contain, protect, handle or deliver, or present a commodity or waste. Packaging made from more than one material will be taxable if plastic is the predominant material by weight.

HMRC understands this new tax needs work on its side, as well as industry collaboration, in order to help businesses understand and comply with the requirements. Its compliance strategy follows its general approach of promoting compliance and preventing and responding to non-compliance. When businesses take their ‘best steps’ to comply with the tax, HMRC says it will recognise this. It has a range of enforcement and inspection powers to ensure compliance with the tax and will only resorts to tougher sanctions with those that deliberately evade the tax.

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