British Plastics Federation develops online tool for UK Plastic Packaging Tax with Ernst & Young
22 Mar 2022 --- The British Plastics Federation (BPF) is introducing a free online tool to help companies ascertain whether their products qualify for the upcoming UK Plastic Packaging Tax. The tool is designed to be “quick and easy” and built on knowledge provided by consultancy firm Ernst & Young (EY).
The tax comes into effect from April 1, 2022. It stipulates that any company annually importing more than 10 metric tons of plastic containing less than 30% recycled contact will face a £200 (US$264) levy per ton. Any amount less than 10 metric tons will be exempt.
“As this is an unprecedented, comprehensive, first-of-its-kind tax for the industry, the BPF has been working tirelessly with members to ensure they are as prepared as possible for its implementation. We hope the industry and its varied supply chains will find this decision tree useful in navigating this tax,” comments Stephen Hunt, BPF membership services director.
Taxing issues
The legislation is intended to increase the amount of recycled material used in packaging products. However, a survey conducted by the BPF found that less than a third of companies feel that they fully understand the tax.
The BPF says companies are confused by what evidence they must submit and when they are eligible for tax credits as the legislation draws near.Areas of uncertainty include the evidence companies must submit and when companies are eligible for tax credits. Uncertainty also exists around calculating the amount of tax liable (if any), how VAT is to be applied and the information required on invoices for tax-eligible products.
In response to the above queries, the BPF worked with EY to produce a guide to the plastics packaging tax, which is available to members of the trade association. Out of this guide, the BPF produced an online “decision tree” to help other companies understand the extent to which their products are liable to the upcoming tax.
“EY has been delighted to work with the BPF in developing a practical and user-friendly decision-tree, which will enable companies to readily engage with the new tax and ensure that they straightforwardly identify and comply with the obligations placed on them by the new rules,” says Steven Effingham, EY’s director of tax policy.
Oversight concerns
Yesterday, PackagingInsights reported that some packaging manufacturers and industry bodies fear that the UK Plastic Packaging Tax lacks the necessary detail to effectively reduce fossil fuel-based material usage and will instead punish businesses actively attempting to lower their carbon footprint.
The Food and Drink Federation argues the legislation contains a critical oversight – many plastics that come into contact with contaminants such as food cannot be recycled and should be exempt. The UK government, which passed the law in 2018, failed to make exceptions in these areas and will now tax businesses according to standards they cannot heed.
Packaging manufacturer HLP Klearfold has also created a simple guide for understanding the upcoming UK Plastic Packaging Tax amid reports of growing confusion around how the law will be enforced.
By Joshua Poole
