What I need to know about plastic tax

If you’re a business who manufactures plastic packaging or you import plastic packaging then you need to be aware of the plastic packaging tax which is coming into place from 1st April 2022. The government has introduced this tax in their efforts to help the environment. However, biodegradable and compostable plastic will still be subject to the tax.

The tax will be charged at a rate of £200 per metric tonne of packaging which contains less than 30% of recycled plastic. 

If your packaging consists of various materials but contains more plastic when weighed than any other material it will be classed as plastic. You will need to prove to HMRC that your packaging is exempt from the tax, so it’s important that you keep a record of all the materials which are used in your manufacturing process.

Importing of packaging such as plastic bottles containing liquids i.e. fizzy drinks may also be subject to the tax implications. This is because these items are designed for single use. Other items such as plastic bags, doggy bags, nappy sacks, bin liners, disposable cups and straws will also be subject to the plastic packaging tax. 

Exemptions

If your company produces or imports less than 10 tonnes of plastic packaging during a year then you will be exempt. Certain types of packaging regardless of the amount of plastic they contain will also be exempt, for example packaging for medical products, transport packaging for imported goods, packaging used for storage purposes including glasses cases and equipment for transport storage.

Other things you need to consider

Invoices – if your business is liable for Plastic Packaging Tax then you must apply this cost on your invoices just as you would VAT. You will need to make these changes in your accounting software.

Contracts – if you are contracted to supply or import plastic packaging you will need to factor in the price of the plastic packaging tax so that your client can pass on the amount to their customers. You will need to confirm whether or not the items are subject to plastic packaging tax or exempt.

If you need support with preparing your Sage 50 software for this transition then please get in touch.

9/11/2021

Any advice relating to accounts or tax should be sought from your tax accountant. Sage Accounts Solutions Limited will not be held responsible for any loss or damage caused as a result of the information contained herein.”

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