Back to news
24 August 2021 General
Share

PLASTICS TAX LEGISLATION CONSULTATION

The FPA has submitted its response to the HMRC technical consultation on the draft secondary legislation surrounding the introduction of the Plastic Packaging Tax (PPT). The primary legislation is contained in the 2021 Finance Act for which no amendments were tabled for PPT and the tax continues to attract cross-party support.

Highlights from our response include:

  • The need to overcome the huge advantage given to importers of empty and filled packaging for which the packaging only is taxed versus domestic producers paying tax on scrap and trim
  • The difficulties that will be faced by smaller producers less able to compete with bigger ones for recycled content
  • The need to ensure the requirement to hold evidence on recycled content is rigorously enforced especially for imported packaging. The British Plastics Federation is working with HMRC to develop set minimum requirements to validate claims on recycled content. The tax should not be introduced until a system which eliminates fraud has been agreed.
  • Only being able to pass on the tax as a price increase and not identifying the tax element means VAT will be paid on the tax
  • Clarification on whether only the polymer element will be taxed, with any fillers used outside the scope of the tax. To date HMRC as not been able to provide an answer.