IOM3 Respond to New HMRC Plastic Tax Legislation

HMRC has published the draft legislation for the introduction of a new tax on plastic packaging with less than 30% recycled content. This is to take effect from April 2022.

IOM3 CEO Colin Church FIMMM CEnv CRWM MCIWM reacted to the legislation: “It is good to see progress being made on this important issue. Creating strong demand for recycled plastic is a key element of moving to a more circular economy, which in turn will both help tackle the marine plastic pollution problem and support the world’s efforts to avoid harmful climate change.

However, IOM3 was disappointed that the government has chosen to retain the proposed position for transport packaging to exclude packaging used for transporting imported goods but include packaging used for transporting exports. The different tax treatment for imports and exports risks disadvantaging UK manufacturers.

New HMRC plastic tax legislation puts UK exporters at a disadvantage

The inclusion of packaging-type products that do not fulfil a packaging function until they are used by the end-consumer and products that could also be characterised as longer-term storage items could lead to confusion in defining taxable products. Further clarity in legislation and guidance will be required to ensure taxpayers understand their obligations and to avoid capturing products that are not plastic packaging but complete some form of containment or protection function.

Dr Church continued: “It will be very important for Government to ensure that this policy works alongside proposed changes to producer responsibility for packaging, different deposit return schemes across the UK and action to address inappropriate disposable items. This is necessary to avoid the risk that this combination of policies results in producers moving to different materials that have worse environmental impacts.”

The consultation had 291 written responses. You can find the summary of the responses, the government’s decisions on the final policy design and draft legislation here.

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