October 27, 2021 by Joshua Doherty

Six amendments made to Plastic Packaging Tax

The Treasury has today (27 October) published six amendments to the law which will see producers charged £200 a tonne for plastic packaging containing less than 30% recycled content.

The government says the charge, known as the ‘Plastic Packaging Tax’ and due to be implemented in April 2022, will provide a clear economic incentive for businesses to use recycled plastic material in plastic packaging.

Plastics Tax — The Treasury expects to earn more than £900 million through the tax over four years (Picture: Shutterstock)

It added that this will create greater demand for this material and in turn stimulate increased levels of recycling and collection of plastic waste, diverting it away from landfill or incineration.

Amendments

The six minor amendments posted today will be implemented in the Finance Bill 2021-22, to amend the Finance Act 2021, where the tax was formally made law.

The Finance Act dictates that the charge to plastic packaging tax arises when a chargeable plastic packaging component is both produced in or imported into the United Kingdom.

Under the first amendment today, HMRC will be able to “make provision to modify the timing of an import, and the meaning of import and customs formalities, using secondary legislation”.

This modifies section 50 of the 2021 Finance Act, which says items are taxable “as soon as all such formalities have been complied with in respect of the component, and in any other case, at the time of importation for the purposes of the customs and excise Acts.”

Exemptions

The second amendment will “ensure businesses below the de minimis threshold, who currently do not have a liability to register, do not have to pay the tax”.

“This change ensures that the policy intent is achieved and reduces the burden of the tax on those businesses who manufacture and/or import plastic packaging below the de minimis threshold,” the document said.

Currently, under section 53 of the 2021 Finance Act, no tax is charged to transport packaging or tertiary packaging and road, rail, ship and air containers.

The third amendment will provide tax reliefs “for persons enjoying certain immunities and privileges, such as visiting forces and diplomats.

It also adds a provision to set administrative requirements in secondary legislation.

“This will ensure compliance with international tax agreements”.

Groups

The fourth amendment “transfers the obligations of a group of companies, such as completing returns, “to the representative member of that group”.

The fifth requires HMRC “to notify the representative member “of the date that applications for and modification of group treatment will take effect”.