HMRC has published the draft legislation for the introduction of a new tax on plastic packaging containing less than 30% recycled content.
Due to take effect from April 2022, IOM3, the Institute of Materials, Minerals and Mining, has welcomed the progress made and said it is glad to see some of the issues and the institutes raised in response compiled in August 2020 addressed.
IOM3 CEO Colin Church, said, “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 said it was disappointed that the UK 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. Adding that the different tax treatment for imports and exports risks disadvantaging UK manufacturers.
The firm continued by saying 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. They requested 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.”