The UK Plastic Packaging Tax and What It Means for You

On April 2022, the UK government's plastic tax came into force, affecting plastic packaging manufactured or imported into the UK that does not contain at least 30% recycled plastic.

The plastic packaging tax, originally issued for consultation in November 2020 as draft primary legislation, has two aims: to increase the amount of recycled plastic used in the making of plastic packaging, and to cut levels of plastic waste sent to landfill.

We'll take a closer look at the plastic tax, who is affected, what products it covers, and explain why the paper industry continues to offer a cleaner, greener and more sustainable alternative to plastic.

The history of plastic packaging

We have to go all the way back to 1862 and the Great International Exhibition in London for the first documented appearance of plastic packaging. Dubbed 'Parkesine' it was created from cellulose by Alexander Parkes.

It was followed by the invention of cellophane in 1900 by Swiss textile engineer Dr Jacques Brandenberger, and 33 years later, Dow Chemical lab worker Ralph Wiley, stumbled across Saran, initially used to protect military equipment, but was later used for food packaging.

Plastic packaging has gone on to permeate almost every aspect of our lives - but at what cost?

The slow shift to recycled plastic

It's a depressing fact, but a true one: microplastic has been found on Mount Everest and in the Mariana Trench - the world's highest and lowest points.

Plastic pollution has entered the food chain to such a degree that scientists have warned the natural balance of several ecosystems are at risk of being severely disrupted.

Of the 8.3 billion tonnes of plastic business ever made, 6.3 billion tonnes has become waste. Of that, only 9% has become recycled content.

Billions of tonnes in landfill

If things don't change, 12 billion tonnes of plastic packaging will be in landfills by 2050, not to mention the amount that has entered our bodies and that of the food we eat.

In comparison, the paper business recycles around 200 million tonnes annually - about half the amount it produces. It's not where we need to be, ideally 100% of what is generated should be reused, but we're working on it.

The good news is, recycling paper also generates around 5% the pollution of virgin products, and uses half the amount of energy. But back to the plastic tax...

Fighting back: the plastic tax

It's clear something has to be done to encourage companies to rethink their use of plastic packaging. So, what is the new business tax on plastic? Let's break it down.

The UK government's plastic packaging tax (UK PPT) applies to UK manufacturers or importers of plastic packaging, including importers of packaging that already contains goods.

A plastic packaging component is liable for tax if:

(a) the proportion of recycled plastic in the component, when measured by weight, is less than 30% of the total amount of plastic in the component, and

(b) it is finished

The plastic packaging component

The UK tax, imposed from April 2022, includes a very broad definition of a chargeable 'plastic packaging component'.

It covers anything "designed to be suitable for use, whether alone or in combination with other products, in the containment, protection, handling, delivery or presentation of goods at any stage in the supply chain of the goods, from the producer of the goods to the consumer or user."

Not only does the new tax on plastic packaging cover items such as coat hangers, but also reusable and refillable objects, including plastic crates and intermediate bulk containers.

Plastic bags, bin liners, nappy sacks and disposable cups will also face the tax, and some imports of packaging that already contain items, such as plastic bottles filled with drinks or plastic packaging around goods, could also be liable.

The UK business which performs the last substantial modification before the packing or filling process will face the tax liability, as well any business which imports plastic packaging components which have already undergone their last substantial modification.

Avoiding the new plastic packaging tax

Producers or importers of plastic packaging have to demonstrate to HM Revenue & Customs (HMRC) that one or more packaging components which contain plastic are not subject to the tax.

That means companies must record what was used in the manufacturing of the packaging and the weight of each material. If a business can't produce this documentation, the packaging component will be treated as entirely plastic and will face the tax.

Although the tax aims to increase the use of and create greater demand for recycled plastic, there are also many products not covered by the plastic tax, which came into force in April 2022.

Exemptions to the tax

They include glasses cases, tea bags and printer cartridges imported into the UK, and the following items will not face the tax:

• with more than 30% recycled plastic content;

• made of multiple materials of which plastic is not proportionately the heaviest when measured by weight

• less than 10 tonnes of plastic packaging are manufactured and/or imported by a business annually

• it is manufactured or imported for use as immediate packaging of human medicines

• it is in use as transport packaging to import products into the UK

• it is exported, filled or unfilled, unless it is in use as transport packaging to export products out of the UK

What happens if businesses don't comply with the tax?

Domestic producers of plastic packaging, those that have imported it into the UK and their business customers are all liable for the new tax.

Failure to register, file returns or pay the tax would result in civil and criminal penalties.

If a business does not comply with a tax requirement, there is a £500 fixed penalty, and a penalty of £40 for each day after the first, until the fine is paid.

Accelerating the use of recycled plastic

As we've said, the tax aims to increase the use of recycled plastic in the value and supply chains and cut the amount of virgin plastic used by businesses in finished plastic packaging components.

The UK tax is one of several plastic taxes targeting businesses and supply chains using predominantly plastic packaging.

Other countries, looking to create a circular economy, cut the amount of non reusable plastic packaging in the system and increase the amount of recycled plastic material, launched their own legal efforts before the April 2022 tax.

EU Members pay their fair share

The EU has already launched a 'plastic tax' as part of its post-Covid recovery package to support businesses and create a circular economy, in the form of a pre-agreed contribution from the member states.

Rather than imposing a direct business tax on exported packaging or imports of plastic products, it is based on the amount of non-recycled plastic packaging waste produced by mainly large businesses in member states at a set rate of €0.80 per kilogram.

It could generate up to €8 billion in extra revenues!

The resurgence of paper and board

We have been shouting from the rooftops for years about the shift in attitudes toward sustainability, and the greater demand for paper and board products made with recycled material, as businesses and their customers look to cut their plastic waste and carbon emissions.

We've responded to that demand for more sustainability in a variety of ways, including becoming the first UK paper merchant to be carbon balanced, as well as being certified by the Forest Stewardship Council (FSC) and the Programme for the Endorsement of Forest Certification (PEFC), EU Timber Regulation-compliant and ISO14001 environmental management system accredited.

Our sustainability commitments

We're thrilled to have sold 100,000 tonnes of carbon balanced paper, and stock 21 products that have either FSC Mix or FSC Recycled labels, offering a wide range of choice for businesses looking to add an FSC label to their products.

Sustainability is at the heart of everything we do, and we are proud to have committed to the PEFC Chain of Custody standard.

It ensures that wood fibre used for paper production has been sourced from well-managed forestry, and is certified to standards that uphold specific social, environmental and economic criteria.

Eco-friendly alternatives to plastic packaging

Lots of businesses are looking to make carbon savings through sustainable packaging, so let's spotlight two of our wide range of products.

Delipac

Delipac is a 100% recyclable, 100% home or industrially compostable and 100% biodegradable packaging is certified plastic free, PFAS free and a carbon offset product.

It's an eco-friendly, sustainable alternative to plastic packaging for businesses in the food, beverage, cosmetics or pharmaceutical industries.

Ecofoil Digital

Ecofoil Digital's substrate materials are carbon balanced through the World Land Trust and are 100% recyclable at its end-of-life stage.

They're also manufactured without a thermoplastic polymer resin top layer and have been certified as plastic free by A Plastic Planet.

The print industry shifts from poly to paper

We've also supported the print industry as it moved from using polyethylene and polypropylene mail wrap and plastic bags to package publications to cleaner, greener paper alternatives.

Our Revive range

This range of products includes Revive Media and Revive Media Plus, which are specifically designed for the magazine sector and publishing business.

Both are made from FSC Recycled 100% post-consumer waste

The paper revolution

The impact of plastic and its polluting effects on our environment are finally starting to outweigh some of the convenience it offers, and businesses in the UK as well as other countries have become an integral part of the shift away from plastic packaging.

The UK plastic packaging tax is one part of a much broader effort to reduce the amount of plastic waste that business generates globally.

When business meets science

Many small, medium and large businesses are paying closer attention than ever to what the scientific community is saying about the state of the planet.

In some cases, it's because their customers and investors are doing the same thing.

The plastic tax is another incentive to start or accelerate the shift away from unsustainable, energy intensive and polluting products to an alternative that's measurably cleaner and greener, and will enhance a businesses ESG profile.

Join our paper revolution

At Denmaur, we've made our commitment to the environment totally transparent for many years. Our customers know every paper or board product we source is traceable and sustainable, because it's at the core of everything we do.

Buying carbon balanced, recycled products from us doesn't involve lots of complex paperwork or depressing tax documentation - our supply chains are clear and defined.

We work hard to ensure there are no nasty surprises!

Contact us for further information

Drop our team a line today on 01795 426775 or email us at info@denmaur.com and we'll do all we can to meet your every paper need.