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Plastic Tax: All You Need to Know in 2024

EcologyPolicy

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Stephanie Safdie

updated Dec 13, 2023

US Copywriter at Greenly

filled up clear plastic water bottle on display

It’s no secret that plastic isn’t good for the environment. Plastic isn’t biodegradable, meaning – once it’s created, it can never be fully destroyed. Most of the world’s plastic ends up in landfills, contributing to even more greenhouse gas emissions than the production of plastic alone is responsible for.

Plastic has created a plethora of new environmental problems, and therefore – many countries have begun implementing a plastic tax as an attempt to discourage the production and use of plastic.

What is plastic tax, and how will the new plastic tax regulations impact businesses across the United Kingdom?

What is plastic tax?

Plastic tax, otherwise known as plastic packaging tax or PPT for short, is a new type of environmental tax aimed to discourage the use of new plastic and increase awareness on the availability of recycled plastic that can be used instead. The plastic tax ultimately serves as a financial incentive to indirectly influence businesses to be more environmentally friendly.

What are the new plastic tax rules?

The new plastic tax in the U.K. was first introduced on 1 April 2022, and was released in order to motivate businesses to make use of the recycled plastic available in their packaging instead of contributing to further greenhouse gas emissions in the production of new plastic. The plastic tax will penalize any company in the U.K. that is associated with imported or packaged plastic produced in the U.K. that isn’t made of, at minimum, at least 30% of recycled plastic.

As of right now, the plastic tax will charge entities that don’t make use of recycled plastic at a rate of £200 per tonne of packaged plastic. This new plastic tax is subject to all of the businesses in the U.K. that either make or use imported plastic in their packaged goods available on the U.K. market – meaning a whopping 20,000 businesses could be affected by the new plastic tax in the U.K. Those who manufacture less than 10 tonnes of plastic packaging annually will be exempt from the new plastic tax. However, if any enterprise is to exceed the 10 tonnes of plastic packaging limit – they will be required to register with the HMRC, otherwise known as HM Revenue & Customs in the U.K. (who deal with the collection of taxes in the United Kingdom) – and pay the plastic tax every quarter.

Is there a specific reason this new plastic tax is becoming compulsory for so many businesses across the U.K.?

Why is the plastic tax being implemented in the U.K.?

While it may seem out of the blue for some people, plastic tax has been a long time coming in the United Kingdom. Back at Budget 2017, the U.K. government announced that they would start mitigating the distribution and use of single-use plastic – and the announcement was well received, which encouraged the U.K. government to draw up further plans to discourage the use of plastic.

The U.K. announced a new plastic tax on plastic packaging back at Budget 2018, with similar protocols to the recent plastic tax update in April 2022 – that any plastic manufactured without at least 30% of recycled plastic be taxed. After seeking the approval of the potential plastic tax in February 2019,

By the time Budget 2020 came around, the U.K. government was able to further illustrate how the plastic tax would work in conjunction with the HM Revenue & Customs (HMRC) – and finally published a detailed outline of how the plastic tax would be implemented.

“ The final draft of the legislation for the new plastic tax was included in the Finance Bill for 2021, and was finally set forth as an official regulation on 1 April 2022. ”

Why did the U.K. go through so many years of trial-and-error attempts to establish the new plastic tax?

Well, the rate of plastic consumption in the U.K. isn’t good – as much of the world continues to rely on plastic as it’s cheap, lightweight, and easily shaped into various molds for product packaging. The world produces an alarming total of 370 million metric tons per year, with that number skyrocketing up to 80% at the turn of the century. Unfortunately, the U.K. isn’t helping to bring those numbers down – as the average U.K. household is estimated to discard a whopping 100 billion pieces of plastic from packaging every year, with the majority of these being products bought from the grocery store. The U.K. is also contributing to the greenhouse gas emissions created from plastic waste, too – with 2.5 million metric tons of plastic packaging waste created in 2021 alone.

The problem with plastic is that it is already impossible to destroy, and yet – the world keeps creating more and more of it. Think of plastic like a fire. A fire is difficult to put out alone, but if you keep throwing more wood onto the fire – the fire becomes even more challenging to put out. It’s the same situation with plastic, as the more plastic that is produced and thrown away, the more it will negatively impact marine life with residual plastic in the oceans and contribute to global pollution.

Does the new plastic tax do a good job of making sure everyone is held accountable for their use of plastic packaging?

Who is subject to pay according to the new plastic tax?

The plastic tax won’t amount to much if only certain companies who use an exorbitant amount of plastic are required to follow the regulation. Therefore, all companies who manufacture or import plastic in the U.K., including business customers and those who purchase goods packaging in plastic – are subject to the plastic task.

This may seem like a stringent rule to some, but truth be told – it is the only way that the country, and subsequently the world, will begin to reduce the use of plastic.

What other reporting is required under the new plastic tax regulations?

The most note-worthy rule of the new plastic tax in the U.K. is that if your business has manufactured or imported more than 10 tonnes of plastic packaging to become available on the U.K. market over the course of twelve months – your company must register with the HMRC to ensure that your plastic tax, alongside other mandatory taxes according to the U.K. government, are paid.

While those who produce or import less than 10 tonnes do not need to be registered with the HMRC, it is crucial to register if your company thinks that they might go over the 10 ton limit. Even if your company is certain that they will not exceed the 10 ton limit, it’s beneficial to keep records of your activity regarding plastic as proof to show the HMRC in the event they request a plastic tax from your company.

Other important things to note when preparing to pay your plastic tax include understanding how the plastic tax is calculated to begin with. The plastic tax is calculated by determining the overall weight of the plastic, as well as what materials were used to create the plastic in the first place. For instance, the amount of fossil fuels it took to generate the energy to create the plastic may be used to calculate a company’s overall plastic tax. The amount of recycled plastic used will also influence the fine that a company must pay to comply with the new regulations regarding plastic tax.

This seems like a lot of work to go through to place something as simple as a plastic tax. Why doesn’t the U.K. government simply set a standard plastic tax on all plastic products?

Why is plastic packaging so bad for the environment?

There’s a reason why this new plastic tax strives to carefully calculate the total fine that a company must pay, and traces all the way back to the production of the plastic itself.

Many people think that they can recycle their plastic and that it will avoid the deleterious effects that plastic has on the environment. As long as it’s recycled, it gets reused and prevents the plastic from ending up in landfills or the ocean, right?

The problem with plastic is that it never fully decomposes, and most people don’t know what is actually recyclable and what isn’t. This leads much of the plastic that is recycled to end up in the landfill, as machines can’t sort it out as well as humans. The plastic that remains in landfills continue to emit harmful toxins and greenhouse gas emissions that will negatively impact the state of the planet for future generations to come.

Striving to reuse materials such as aluminum, paper, glass, and most importantly, plastics – can help drive down the need for production of single-use materials and simultaneously reduce energy costs. Ultimately, recycling helps to avoid the environmental problems that many of these products create.

The good news is that recycling has become more common in recent years, as public waste bins have been divided between trash, plastics, and paper. However, many of us recycle incorrectly – specifically plastics.

There are two clear cut solutions to solving this problem: either recycle plastic properly to avoid contributing to the exorbitant amount of plastic in landfills, or stop using plastic all together.

Is there a way you can avoid plastic tax?

👉There is absolutely a way you can avoid having to pay the plastic tax in countries like the U.K. – and it’s to stop using so much plastic.

However, this is sometimes much easier said than done – as many products are inevitably made of plastic and the use of plastic sometimes can’t be mitigated no matter how hard one tries to find a sustainable alternative. This can include the use of contact lens cases, purchasing a product at the grocery store packaged in plastic, or even flossing picks.

However, while it can be difficult to find alternatives to plastic – the world is simultaneously showing us that it can be done. Popular coffee chains like Starbucks have made an effort to offer paper straws instead of plastic ones, and more and more companies are committing to finding sustainable alternatives to their packaging – such as paper padding instead of plastic.

Small things like opting for a reusable water bottle, utensils, switching out tea bags for tea strainers, and avoiding the use of plastic wrap can make a real difference over time.

Things like the new plastic tax in the U.K. show us that it is more important now than ever to seek sustainable alternatives to the use of plastic wherever possible – as it won’t just be bad in the ongoing fight against climate change, but add up to become a new financial burden for companies in the long run.

What about Greenly?

If reading this article about plastic tax has made you interested in reducing your carbon emissions to further fight against climate change – Greenly can help you!

Greenly can help you make an environmental change for the better, starting with a carbon footprint assessment to know how much carbon emissions your company produces. Click here to schedule a free demo!