Coping with the new Plastic Packaging Tax
16 April 2022
The Government’s Plastic Packaging Tax (PPT) has now come into play, designed to tackle single use plastic. What now, asks Darren Smith?
OVER THE past year, in the run up to the changes, many manufacturers warned businesses of the impact and urged them to take immediate action to avoid incurring additional costs. Yet despite such efforts, concerns are coming to light that businesses did not prepare, and are learning for the first time, potentially the hard way, what the tax entails and the repercussions of not complying.
As one of Europe’s leading packaging suppliers with a wide customer base ranging from over 600 distributors, we spent the past year raising awareness of the upcoming tax. We advised businesses to collate a list of packaging containing plastic material, specifying the amount of recycled content, and reviewing alternatives if needed. However, in August 2021, 83% of businesses asked did not know about the tax, according to research from Veolia.
The tax applies to plastic packaging produced in or imported into the UK, which does not contain at least 30% recycled plastic, only excluding packaging which is not predominantly plastic by weight. The new measure will impact up to 20,000 UK manufacturers of plastic packaging, importers of plastic packaging, business customers of manufacturers and importers of plastic packaging.
Those who put a strategy into place for dealing and complying with the tax, will appreciate that it was a rather lengthy process. The PPT created a need for entirely new systems and processes to collate data for compliance, pricing, contracts and supply chains. It also had various one-off costs such as getting familiarised with the new rules, training for staff, registration with HMRC, and developing the required reporting framework to complete tax returns. And then there’s the continuing costs, such as compiling, filing and paying tax returns, keeping appropriate records, and amending returns.
Naturally this sparked a flurry of movement in the market, something we have witnessed first-hand as we have received an influx of enquiries in the run-up to the tax being introduced. Many businesses turned to us seeking advice on how to adapt their packaging strategy to fit with the new requirements. As driving sustainable solutions is part of our mission and values as a business, we have been more than happy to offer our support, as this is a message that has always been part of the conversations we have had with distributors long before the PPT was announced.
For those organisations yet to introduce a solution, we advise working closely with packaging suppliers who have the knowledge to reduce plastic use in the most cost-effective, and sustainable way. Once the initial adjustment starts to settle, we look forward to watching the industries involved in plastic production working together to introduce solutions that protect our environment and support circular economy principles. With the use of virgin plastic dropping, we’ll be sure to see the benefits as we protect ecosystems, save energy, reduce the demand for raw materials and cut carbon emissions. In the meantime, we’ll continue to educate and support our customers and demonstrate the benefits while working with them to develop new products.
Darren Smith, head of marketing, Southgate Global
For more information, visit www.southgatepackaging.com