Plastic Packaging Tax (PPT)

Missed opportunities and a lack of international certification

What is the Plastic Packaging Tax?

The plastic packaging tax (PPT) will apply to manufacturers, importers and users of plastic packaging and will be administered by HMRC. It will impact a wide range of plastic packaging formats and applies to all polymer types, including bio-based and compostable plastics. Within plastic packaging overall, packaging used for foodservice is a tiny proportion.

The tax, to be charged at a rate of £200 per tonne of packaging, will apply to plastic packaging with less than 30% recycled content and to both packaging manufactured in, and imported into, the UK. In respect of foodservice packaging, it will apply to items designed to be used in the supply chain to contain food, including cups, bowls, plates, etc – as these are within the definition of “packaging”. This also applies whether or not the packaging can be reused.

Unanswered questions and confusion about the tax

There is still a lot of confusion about what the tax actually is. A lot of people refer to it as the plastic tax, but it is actually the plastic packaging tax. This is an important distinction in foodservice as a lot of people think it’s going to apply to plastic cutlery – but plastic cutlery is not packaging. So, it won’t apply.

The tax comes into effect on 1st April, but businesses can’t register on the government website until that date. At time of writing, HMRC has issued, and then withdrawn, the requirement to provide information on all sales invoices. Currently, as nothing has been confirmed, business will be very reluctant to implement IT changes, with no clear idea of what the final requirements will be.

This all feels very rushed and ill-conceived and while trade associations such as the Foodservice Packaging Association have worked hard to advise HMRC, seek clarity and help their members prepare, there are still a lot of unanswered questions and quite a lot of confusion. In practical and simple terms, and in respect of the impact on the foodservice industry, we – and other responsible manufacturers and distributors – will need to increase prices to absorb the £200 per tonne applied to any plastic packaging which has less than 30% recycled content, as we would with any other tax.

Celebration have delayed price adjustments

“At Celebration we have been able to import a lot of plastic packaging items ahead of the 1st April deadline” says managing director, Nick Burton.  “As I result, I am pleased to say that we will not be adjusting prices, due to the tax, until Friday 1st July. This means that any order received up to and including Thursday 30th June will not be subject to any increase due to the tax.”

A question of certification?

The tax will be payable by businesses which manufacture a finished plastic component or complete the last substantial modification to the plastic packaging here in the UK. But it also applies to plastic packaging imported into the UK, and while some certification programs for plastic postconsumer resin exist, not all suppliers can provide proof of the percentage of recycled content.

If we’re asked to confirm the percentage of recycled content in imported packaging, we have to rely on the manufacturer to prove it, so this is a truly international issue and yet the tax – and the burden of responsibility – is being applied only in the UK.

Another issue facing manufacturers is a shortage of recycled raw materials and the fact that recycled plastic currently costs considerably more than virgin material.

A missed opportunity to promote reusable packaging

In introducing this tax, the government has missed an opportunity to promote the use of reusable plastic products, which make an important contribution to reducing the use of plastic.

The stated aim of the PPT is “to increase the use of recycled plastic in packaging”, but there is a lack of clarity around reusable packaging, as while plastic storage boxes are exempt, the tax still applies to reusable foodservice packaging. One of our restaurant customers is saving many tonnes of plastic a year by using our microwavable reusable portion packaging instead of single-use plastic packaging. But then you have to consider that the tax is applied on a weight basis, and to be serviceable, reusable packaging is generally thicker and heavier.

If a foodservice operator is looking to understand the issues created by the PPT, they need to work with a consultative supplier to ensure that they’re choosing the right packaging – that’s functional, fit for purpose, popular with consumers and above all, sustainable.