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A guide to the ecoVeritas UK Plastic Tax calculator

29th March 2021

ecoVeritas has launched a free online tool for brands, retailers and their packaging supply partners to calculate future costs in preparation for the incoming UK Plastic Packaging Tax – set to be implemented on April 1, 2022.

The easy-to-use calculator enables users to input information relating to the amount of plastic packaging manufactured, imported and exported, before generating an estimate of direct costs based on the current draft of the plastic tax legislation. Users can also calculate potential annual tax savings that could be achieved by increasing the amount of recycled content used in the manufacture of plastic packaging.

You can find the calculator on the ecoVeritas website here.

We have also created this handy guide to the tax and provided a glossary of key terms to help ensure the correct information is entered into the calculator so that results are as accurate as possible.

What is the tax and why is it being implemented?

The UK Plastic Packaging Tax aims to reduce the environmental impact of packaging and cut manufacturers’ reliance on virgin plastic. The tax will apply at a rate of £200 per tonne of plastic packaging, which does not contain at least 30% recycled plastic from April 1, 2022. This will apply to plastic packaging which has been manufactured in, or imported into, the UK.

What counts as plastic packaging?
All products made of any materials to be used for the containment, protection, handling, delivery and presentation of goods, from raw materials to processed goods, from the producer to the user or the consumer. Non-returnable items, used for the same purposes, are also considered to constitute packaging. This includes products that perform as packaging for the end user e.g., cling film.

Are all types of plastic to be included in the legislation?

There is an exemption for cellulose-based natural polymers that have not been chemically modified.

What is the scope of the tax?

The legislation is still in draft but it currently stands as follows:

IncludedExempt
Packaging that is predominantly plastic by weightProducts designed for long term storage
Products that are packaging-type items that do not fulfil a packaging function until they reach the consumer, e.g. clingfilm and sandwich bagsPrimary packaging of products licensed to be placed in the UK market under Human Medicines Regulations 2012
Transit packaging that is exportedImported transit packaging around finished goods

Who is liable for the tax?

UK packaging manufacturers and converters, and importers of plastic packaging, either empty or filled, into the UK.

Importantly, overseas taxpayers importing into the UK have a liability and will be required to prove the recycled plastic content of packaging that is imported. They will also have to provide evidence to the same standard as that of UK-based businesses that import plastic.

Importers that are unable to prove the amount of recycled content within packaging to a satisfactory standard, will have to pay the tax.

The draft legislation includes powers to establish regulations regarding UK tax representatives for overseas businesses that are liable for the tax. The representative could be held jointly and severally liable for the debts and will be a point of contact in the UK for the government in collecting amounts due from the overseas business.

Marketplaces and fulfilment houses become liable if overseas businesses don’t pay. The government intends to limit joint and several liability for tax not accounted for on sales made through their platform to online marketplaces and fulfilment houses, where they knew that clients were not complying with the tax and have not taken steps to ensure compliance or to stop dealing with that particular client.

Businesses that manufacture or import less than 10 tonnes per year are exempt from the tax.

Key definitions

Primary packaging – All packaging on individual products purchased by retail customers, who dispose of the packaging at the end of use.

Secondary packaging – Packaging that presents products in groups and can be removed from the product without affecting its original characteristics.

Tertiary/transit packaging – Packaging that facilitates the handling and transport of a number of sales units or grouped packaging in order to prevent physical handling and transport damage. It does not include air, rail, ship or road containers.

Multi-material packaging – Materials that cannot be easily separated. Multi-material components will be classed as plastic packaging if they are predominantly plastic by weight.

Click here to see what the UK Plastic Tax could cost to your business for free!

ecoVeritas can provide more detailed cost analysis and guidance on how to improve the amount of recycled content in your supply chain. Click here to contact the team today!