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30 November 2021 General


Response from the Foodservice Packaging Association

To HMRC Indirect Tax Design Team


As members of HMRC’s Plastic Packaging Tax Industry Working Group the Foodservice Packaging Association has participated with other members of the group in formulating a response to the consultation.  This process has been lead by the British Plastics Federation who produced the following consultation response which the FPA fully endorses.


We also ask HMRC to consider the following:


  1. The obligations and duties of online market places to ensure traders using their platform maintain records for the recycled content of all the qualifying plastic packaging used for the products they sell or sold as unfilled packaging and that they confirm tax has been paid where due taking into account all sales and not just those sold through their platform.
  2. The process to be followed by importers of filled and unfilled packaging in proving recycled content is made more explicit and standardised.
  3. The administration costs involved in complying with the tax regulations including identifying and accounting for the tax to be paid should not exceed the revenue created by the tax for both individual businesses and for all businesses complying with the tax.





Submitted by

Martin Kersh

Executive Director Foodservice Packaging


0207 993 8343


Plastic Packaging Tax – Draft Secondary Legislation




Further Clarification


Identical design


Records - The concept that identical design stated in Part 1, 2 (1) would include products to be identical in terms of input materials, weight, characteristics and function. The draft secondary legislation incorporates a definition of ‘identical design’ but does not state explicitly what statutory instrument it relates to? Further clarification is required to determine how this definition will be utilized and does this relate to the definition for ‘Common Properties’ and ‘Product Line?’.


To ensure we minimise unnecessary administrative burdens input materials should be defined by polymer type e.g., PP, PE etc. and not by raw material grade as the latter varies by supplier. The terms ‘characteristics and functions are ambiguous and further clarification is required. Perhaps it would be better to focus on product range and product type e.g., pots, tubs, trays, bottle, caps, film, pouches and bags etc.


Plastic packaging component: substances other than plastic


In Part 2 (4) a-g the draft secondary legislation details a list of non-plastic materials, but it is missing fibrous products.


Chargeable plastic packaging component: method of calculation of recycled plastic content


Within the draft secondary regulations Part 2 (7), section 1-5 has been drafted in a way that recognises mechanical recycling. However, this regulation requires modification to further recognise chemical recycling and the associated mass balance and allocation methods used – this is in line with the primary legislation that accepts both mechanical and chemical recycling as methods to produce recyclate for incorporation into products.


The BPF proposes the following modifications to add a provision for chemical recycling the draft legislation as below:


For chemically recycled material a mass balance calculation with associated allocation must be undertaken. This calculation and allocation must be independently audited and certified in a similar way to ISO standards on Chain of Custody ISO 22095 and/or ISO 14021:2016 Environmental Labels and Declarations.


To incorporate recycled content in food contact applications in flexible/soft packaging, it will require the use of chemical recycling as an advanced technology. At present chemical recycling capacity is being significantly invested in within Europe and the UK. To utilise chemical recycling, it will require mass balance and associated allocation methods to be used which are supported by robust certification and auditing requirements. The use of mass balance and certification is widely adopted in a number of applications including biofuels, biomaterials as well as in the energy and timber sector. If the secondary legislation is not modified to accommodate the use of mass balance and allocation presently in common use across Europe, investments underway and planned in the UK will be jeopardized. It will cause brands and retailers to have no technical ability to incorporate recycled content in food contact flexible/ soft packaging, stifling ambitions to fulfil the aims of the tax.


No. 7 (2) The calculation proposed for recycled content is simple and effective for mono structures, however ‘B’ should refer to the total weight of plastic. Calculation methods for recycled content need to additionally address multi-material structures where the recycled content may be only present in one polymer. The calculation also needs to address the use of non-plastics materials including fillers, glues and adhesives, as well as other non-plastic materials that should be excluded from the plastic content. Further clarification is required.


Glues and adhesives for items such as plastic labels need to be considered as to whether they are counted towards the weight of the packaging measured for eligibility to pay the tax. If so, an adhesive could make up a substantial weight of the packaging or outweigh the plastic element entirely. Failure to make allowances for this means adhesives could be used to reproportion what is the most predominant material in the item of packaging and whether the packaging is in scope of the tax or not.


Direct Export Condition


Part 3, Chapter 1, 10 states that to meet the requirements of the direct export condition there is a reporting requirement to state the actual date of export. However, in many cases this date of export is not known at the time of dispatch from the manufacturer or even at a later date. It would put a reporting requirement on freight handlers to report back to the manufacturer which currently is not standard practice in all cases. It is unlikely companies will be able to meet this requirement and end up paying tax on packaging that is subsequently exported and not placed on the UK market. To assist in obtaining the data the date of export should be provided within a timeframe of 30 days from the date of export.


Additionally, the draft secondary legislation states that you must have sufficient evidence of—

(a) the fact that the component has been exported;

(b) the weight of the component that has been exported;

(c) the day on which it was exported,

and keep a record of that evidence.


The term sufficient evidence to be clarified.




Part 4, Chapter 1 (21) I, states that companies must estimate tonnage of finished plastic packaging components which they expect to produce or import in the period of 12 months beginning with the day on which the ‘liability to notify arose’.


It would be more practical to report the actual tonnage from the last 12 months instead of an estimated tonnage for the following year. Estimated tonnages can be difficult to state for some companies due to changing business conditions. This will also avoid the need to update the register as business conditions change.


Specified rules for the of measurement of weight


Chapter 2, (26) 1, a – refers to an ‘agreed method’ of calculating weight. Further clarification is required around the definition of ‘agreed method’. The use of weight provides two challenges

  1. The proposed calculation of recycled content is possible with mechanical recycling however the same calculation cannot be used for chemical recycling where a mass balance and allocation method will need to be used. In addition to calculating recycled content an approved method that is independently audited and certified is preferred to ensure a level playing field. Such a system needs to comply with the following requirements:
  1. Operate internationally / multinational. A central requirement due to the international supply chain.


  1. Operate to recognised international standards on recycled content and traceability.


  1. Ensure a consistent independent audit approach and reporting templates to work from. Have an annual in person audit at a site level with an auditor pool that can be deployed worldwide. For example, one company had tasked audits of their sites in Canada, China, Europe and the UK and needed a company that could deliver an audit consistent in all countries.


  1. Be affordable, credible and add value. To ensure the administration costs associated with implementing the tax are kept to a proportional and reasonably expected level, are robust and transparent, and noticeably add value to business operations.


  1. In some Extrusion and blow moulding applications, multi cavity moulds can have components produced from the moulds of varying weights within the specification range. Computerised systems are used for the make-up of the material blend with mixers ensuring the homogeneous blend of the various materials and recycled material which is then distributed to the blow moulding machine extruders. Therefore, the Mass Balance approach is necessary for calculating the consumption of Virgin Materials and the recycled content within the production run.           
  2. The ability to collect information on waste where that waste occurs after the last substantial modification will require an agreed best practice method and procedure together with a willingness for stakeholders to share such information. It is common practice within manufacture for daily records to be kept on waste which will need to be shared with the company liable for the tax to claim relief.
  3. In collecting information on weight, the use of technical datasheets and specification sheets should be sufficient.
  4. The tolerance level which should be deemed acceptable to calculate weight should be set at a rate of +/- 5%
  5. Labels produced will have a backing to them that may or may not be plastics, and whilst these may be ‘waste or surplus’ when used, as an item they are integral to producing and transporting the labels. Clarification is required as non-plastics should be excluded from the total weight in which tax is due.



Accounting periods


In chapter 3, (31) it states, ‘the accounting periods for plastic packaging tax are the three-month periods ending with 31st March, 30th June, 30th September and 31st December’. This is misleading as commencing with the 31st March may lead companies to assume that the first reporting period relates to January – 31st March. It should be made clear that the first reporting period ends 30th June 2022.


Joint and Several Liability


Part 7, Chapter 1 (46) refers to joint and several liability of the tax. As this tax is an environmental tax paid by importers and producers of plastic packaging components there is no known precedence for joint and several liability (JSL). In the case of the sugar tax it is interesting to note that joint and several liability only applies to importers.


As part of determining joint and several liability, it is believed that a HMRC approved international certification system is required to certify the level of recycled content. This will be necessary to prevent any misstatements being made by the supply chain.


In addition, joint and several liability should only apply after HMRC has exhausted all means possible to pursue the original party for payment of tax and follow the same precedence as the sugar tax where joint and several liability only applies to importers.


Key Issues


Invoicing – Business Statements


Following a short consultation with the Industry Working Group on the tax, HMRC has stated that the mandatory requirements on business invoices will not be imposed by 1st April 2022.


Business invoices should only state the description of products supplied e.g., simply bottles and caps as described on invoices at present. Otherwise changes to software will be required. So, in essence there should be no stipulation for any change to invoices other than a simple statement that the tax has been paid. In this way the change in detail on the invoice is minimised and a huge burden on the supply chain is avoided. It would also avoid extremely lengthy and confusing invoices.


In addition, as the intent is not to levy VAT on PPT, further clarity would be beneficial on the information needed on invoices to deliver this outcome.


Any future amendments to business invoices which go beyond current practice would need appropriate stakeholder engagement and time to implement the changes. Any new requirements must avoid unnecessary burdens on industry.


Definition of reprocessing


Within the primary and draft secondary legislation HMRC has not proposed a definition on the term ‘reprocessor’. It is imperative to ensure clarity around definitions such as a reprocessing facility as it relates to pre consumer waste and to ensure businesses are interpreting their requirements appropriately. Defined definitions avoid any misinterpretations, therefore the BPF would like to propose that HMRC adopt the following definitions of reprocessing facility within the plastic packaging tax legislation.


A mechanical recycling/reprocessing facility is an operation where recovered plastics is turned into flake or pellet in a process that is separate to the conversion line that produced the waste in accordance with the recognised ISO14021:2016 standard.


Chemical Recycling is defined as any reprocessing technology that directly affects either the formulation of the polymeric waste or the polymer itself and converts them into chemical substances and/or products whether for the original or other purposes, excluding energy recovery.


Last Substantial Modification


It is imperative that the industry is only charged tax following the last substantial modification prior to packing and filling. This is to ensure the tax is only paid on finished packaging components and not on waste. As slitting can be a last substantial modification before dispatch to the packer filler provision for this in the list of allowed substantial modifications should be made.


Hypothecating the Tax


To ensure the supply issues can be addressed and appropriate recycling infrastructure created, money raised by the plastic packaging tax needs to be reinvested to address the lack of suitable UK collection, sorting and recycling infrastructure for plastic. This is particularly important due to the fact that the drivers from EPR will not be in place until 2023/24. Now we have left the EU, this could provide the UK with a significant opportunity to build a world-leading recycling infrastructure, providing high value, high quality recycled materials for plastics and an increase in associated jobs and economic activity.


Additionally, further government grants should be made available to speed up the roll out of much needed extra investment in recycling capacity.


Lastly, there would be an overall financial benefit and also a range of associated benefits from using a small percentage of the revenue of the tax to implement a well-designed recycled content verification framework.


Food Contact Regulations, Supply and Technical Constraints


The barriers to increasing 30% recycled content are not primarily financial but are regulatory, technical and supply related. 25% of plastic packaging is incapable of incorporating 30% recycled content due to current regulations. Taxing companies in cases where regulations do not permit the use of recycled material would arguably be unfair and is likely to result in extra costs for consumers. In addition, a further 25% of the market will not be able to include recycled content due to supply and technical constraints.