Plastic packaging tax – are you ready?

Adam Stanley looks into the new regulations companies need to be aware of.

From April 1, 2022, a new tax was introduced for manufacturers and importers of plastic packaging, the Plastic Packaging Tax (PPT). The PPT, which is intended to incentivise the use of recycled material in the production of plastic packaging, brings with it requirements for the whole of the supply chain, making it important for businesses to understand what their obligations will be. The PPT will be chargeable on plastic packaging where the plastic used in its manufacture contains less than 30 per cent recycled plastic. In cases where

Adam Stanley is the policy and public a airs manager at the BDIA. 30 per cent or more recycled plastic is used, no tax will be due however certain record keeping and reporting obligations may still apply to your business.

In order to make it easier for its members to navigate the large volume of o cial guidance on the PPT, the BDIA has prepared a guidance summary and frequently asked questions document. The document provides a summary of the PPT and its requirements, signposting to o cial sources throughout and addressing some of the most commonly asked questions that we have received from member companies. Here are a few key points to think about:

What you need to do

If you are a business that manufactures or imports 10 or more tonnes of plastic packaging (whether or not this plastic packaging is recycled) over a 12-month period you will need to register for the tax. Plastic Packaging Tax will then be payable on eligible plastic packaging at a rate of £200 per metric tonne. Registration will be possible from April 1, 2022. In addition to plastics containing 30 per cent or more recycled content some other types of plastic packaging (such as that used in the immediate packaging of a medicinal product or permanently designated for use other than packaging) are exempt from the tax but may still need to be counted toward the 10-tonne threshold. This means that you may be required to register even if you have no tax liability. A number of di erent methods can be used to determine the weight of components, but whichever option you choose it will be important for you to keep records as evidence. HMRC has provided guidance on how to do this.

Will all non-recycled plastic

packaging be taxed?

Not all packaging will attract the tax, and a number of exemptions and exclusions have been provided. However, these are very specific and are intended to be quite narrow in scope, so it’s important to understand whether your products will be covered before trying to claim them. The PPT is intended to apply to packaging designed to be suitable for use in the supply chain (at any stage from the manufacturer to the user or consumer) as well as for single use by the consumer.

Where packaging contains multiple materials, it will only be treated as a plastic packaging component for the purposes of the PPT where it contains more plastic by weight than any other substance, so even if your packaging contains plastic it may not necessarily attract the tax.

Four categories of product are exempt from the tax:

Products used for the immediate packaging of licensed human medicine Products permanently recorded as set aside for non-packaging use Products used as transport packaging to import multiple goods safely into the UK

Products used in aircraft, ship and rail goods stores The first two of these categories will still count toward the 10-tonne threshold for registration, whereas the second two will not. In addition, there are three types of products that are excluded from the tax and do not need to be included in weight: Products designed to be used in the long-term storage of goods Products designed to be an integral part of the goods Products designed to be reused for the presentation of goods The ‘integral’ product exemption has perhaps attracted the most confusion and interest, but HMRC has sought to clarify that this exemption is quite specific in nature and would not be applicable in most cases. This exemption is intended to apply to products such as water filter cartridges and printer cartridges and is not likely to be applicable to most products even where the packaging could be considered essential for others reasons, such as protection.

Working with customers and suppliers

A previous provision of the PPT had said that companies would be required to include a statement on their invoices showing that the tax had been paid. However, this requirement has now been delayed and will not apply when the PPT starts on April 1. Nonetheless, the PPT does include provisions for joint and several liability, meaning that where a business has failed to pay the tax HMRC could pursue not only that company but other companies within the supply chain that they are connected with. As such, it is important for businesses not required to pay the tax to understand the record keeping and due diligence requirements of the PPT so that they can both demonstrate that they are not required to pay and avoid any liability issues within the wider supply chain. You should keep information that will allow you to demonstrate how much tax you need to pay (or that you’re not required to pay any tax). If you do need to register for the tax, you should keep records and accounts to support the figures you submit in your quarterly tax returns.

Businesses should also undertake due diligence checks in respect of the PPT not only if they manufacture or import plastic packaging components but also if they purchase them from another businesses. If you don’t carry out these checks or keep su cient records of them you could be held liable for unpaid PPT in your supply chain, so there is a strong incentive not only to ensure your own compliance but to work with your suppliers.

If you’ve yet to read the BDIA’s Guidance Summary & FAQ on the Plastic Packaging Tax, you can receive a copy by emailing

adamstanley@bdia.org.uk

BDIA Spotlight 2021 now available

The latest edition of Spotlight, the BDIA’s flagship statistics publication, is now available exclusively to BDIA members. Spotlight 2021 features the latest Dental Profession Overview with its comprehensive review of the composition, profitability and expenditure of the profession. This annual feature contains years of trend data and o ers a valuable insight into changes within the profession. With much of the data in the Dental Profession Overview relating to 2019/20 we are starting to paint a picture of the e ects of the coronavirus pandemic. However, it won’t be until the publication of Spotlight 2022 later this year that some of the pandemic’s most dramatic e ects are reflected in this data. For example, the spend on private high street dentistry stood at £4,938m for 2019/20, representing a five per cent fall from its peak the previous year. Meanwhile, the equivalent NHS spend saw a 5.8 per cent increase for a new peak of £3,680m. Given the temporary cessation of routine dentistry in 2020 and the subsequent gradual recovery of NHS dental activity, this is an area that’s likely to see considerable change when the latest figures are released. The Buyer Behaviour Survey also contained some insights into the pandemic’s e ects on the sector. The survey looks at purchasing habits and preferences within the profession and, given the timing of the 2021 edition (running from May 25 to July 9), this gave us an opportunity to understand how the pandemic impacted attitudes towards in-person meetings with sales representatives. In light of the pandemic, 54 per cent of respondents reported wanting future meetings with sales representatives to be conducted remotely for purchases of consumables and small equipment. By contrast, 71 per cent of respondents expressed a preference for in-person meetings with sales representatives when purchasing large equipment. Work is already underway on the next edition of Spotlight, which will continue to further understanding of how the pandemic has a ected our sector. Spotlight 2022 will also contain the latest Technology and Trends Survey, which will o er insights into the profession’s adoption and usage of a wide range of products and technologies. Spotlight 2021 is available from the Members Area of the BDIA website at

www.bdia.org.uk/members/resources/

statistics