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The Plastics Tax – What is it for?

The nearer we get to April 1st, the more the Plastic Tax looks like an April fool’s joke, visited by the Government on the Flexible Packaging Industry.

The tax, according to the Governments website had the following objectives; 

  • a) To produce a clear economic incentive for businesses to use recycled plastic in the manufacture of plastic packaging.

  • b) Stimulate increased levels of collection and recycling of plastic waste, diverting it away from landfill and incineration.

  • c) Encourage companies to use less plastic packaging.

  • d) Encourage consumers to purchase products which contain less plastic packaging!

This legislation was drafted after a two year consultation period, with alleged consideration of over 160,000 submissions. Either through ignorance or incompetence, the tax cannot achieve any of these stated objectives.

As a consequence, it will be simply another tax of some £400 Million on the UK food industry, whilst also adding to its administrative burden. The reasons why the tax can’t possibly achieve these objectives are,

1) Flexible plastics (films) are predominantly used to extend the shelf of the food within the pack. Thus they must all be approved and tested for food contact.

2) Recycling plastic films is either done mechanically, or chemically, only chemically recycled film can be approved for food contact.

3) However, HMRC have said films with 30% chemically recycled content are not allowed tax relief, thus ensuring that there are no films containing 30% recycled content that can be used for food packaging and as a consequence, no films containing recyclate can be produced which meet the requirements of the act. 

4) In addition, even if (and when) realisation dawns upon HMRC, that chemically recycled films have to be accepted, they are approx 70% more expensive than virgin material, therefore making it cheaper to pay the tax than buying film with 30% recycled content (even if that were possible).

As for encouraging more collection and recycling of plastic waste, what is the point when the resultant recyclate cannot be used either practically, for food contact or economically?

Therefore, unfortunately it seems this legislation is just another example of the Government pandering to the anti-plastic lobbyists. The Government website also claim this legislation will reduce carbon emissions by 200,000 tonnes. Whoever is responsible for producing this fantasy figure should be asked to provide details of their calculations.

By their own admission, the intention is to deliberately encourage the consumer to ‘reduce purchases of products containing plastic packaging’, (their words, not mine). The packaging will obviously have to be of some other material, no matter which material is substituted be it Aluminium, tin, glass, or board, this material will use more of the Earth’ resources and have a higher carbon footprint, so where does the Government get the 200,000 tonne saving in CO2 emissions?

Finally, the policy paper claims that the administration of the tax will be relatively simple, costing the industry only £400K per year! Once again, this statement is either made through ignorance or arrogance. The reason being, the UK exports some £24 Billion of food each year, how much is wrapped in plastic films, no one knows.

However: -

  • The tax does not apply to film exported
  • Nevertheless, the convertor must charge tax on all film sold to customers without the 30% recycled content
  • The convertor then must pay the Government the tax

  • The customer must then keep a record of all plastic packaging exported with their products
  • The tax is then subsequently reclaimed from the convertor
  • The convertor then has to use this information to claim the tax back from HMRC

For the administration alone, one can conclude April 1st is the appropriate date for introducing this legislation. It is obviously more that the Government is seen to be ‘doing something’ about plastics. The final idiosyncrasy of this legislation is that as the bulk of OPP and PET films used in the UK are imported, if we import them with 30% recycled content, we are importing other countries waste plastics!!  

My MP is Mr Toby Perkins, I propose to send him a copy of these notes on the tax and ask for his views – dare I suggest you do the same?

As always, your views on any of the items raised would be welcome, and why not join me on LinkedIn for more regular updates?



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