Has The UK Government Taken The Right Approach With Its New Tax On Plastic Packaging?
by Liz Seyi Digital marketing managerA preoccupation of many a company working alongside
a chartered tax adviser in South West Englandat the
moment, is the UK’s new plastic packaging tax, or PPT. The new tax takes effect
from 1st April, and will involve plastic packaging that is manufactured in or
imported into the UK being charged at a rate of £200 per tonne, if the plastic
in question is less than 30% recycled.
The levy was first announced in the 2018 Budget by
then-Chancellor of the Exchequer, Philip Hammond, and was conceived with the
aim of giving businesses incentives to use a greater amount of recycled
material in their plastic packaging.
However, according to the Financial Times,
food manufacturers have criticised the environmental tax’s implementation,
claiming that it will force them to bump up costs and risk adding to
already-acute inflationary pressures.
What have food companies and industry figures been
saying about the tax?
The newspaper reported that it had heard from
multiple large food firms and representatives of the industry, claiming that
businesses were encountering challenges in their efforts to understand and
comply with the plastics packaging tax.
Food manufacturers reportedly pointed out that the
Government had not put in place any exemptions from the tax for materials that
come into contact with food and are unable to be recycled. As a consequence,
these firms said they were forced to pay the tax – meaning they had to deal
with heightened costs that they would potentially have to pass on.
Sustainability director at the Food and Drink
Federation (FDF), Nicki Hunt, was quoted as saying: “Food and drinks
manufacturers want to do the right thing and recycle more packaging – in line
with the UK Government’s and our own environmental targets – but efforts are
being constrained by restrictions around materials that can have contact with
food, which cannot currently be recycled, and are subject to the new plastics
packaging tax.”
She said that this had the effect of placing
additional costs on businesses, thereby also bringing the risk of higher prices
for customers. She stated that the industry favoured the government taking
action to “further support and incentivise innovation in recyclable packaging
materials.”
The newspaper also cited a “large company source”
as claiming that the manner of the tax’s implementation was “hugely
contradictory as there would be no incentive to use recycled content – the very
aim of the plastic tax.”
How has the Government responded to the food
sector’s criticism?
According to the Financial Times story, the
Government said it had worked closely with industry – including the food
packaging sector – to “ensure businesses were getting the information they
need”.
It explained that it had minimised exemptions to
the tax as a means of encouraging greater use of recycled plastic and
stimulating the supply chain for recycled plastic.
The Government further said: “Food packaging makes
up around 40% of packaging in the UK so excluding it from the tax would
severely blunt its impact. Many types of food packaging already include
recycled plastic or use alternative materials to plastic.”
Whether or not your own business will be directly
or indirectly impacted by the introduction of the PPT, you are sure to
appreciate the assistance and knowhow that will help you to better manage your
own organisation’s tax affairs. This is precisely what a well-qualified and
experienced chartered tax adviser in South West England from TS Partners can
provide.
Enquire
to our team in Wellington, Newton Abbot or Plymouth today, and we
will be pleased to talk to you about how our accounting and tax-related
services and solutions could help your organisation.
Sponsor Ads
Created on May 5th 2022 02:09. Viewed 173 times.