THE National Living Wage will rise by 50p to £12.71 per hour from April 2026, UK chancellor Rachel Reeves has announced in the autumn budget.
This was one of a number of measures announced which could impact businesses operating in the packaging sector.
A further measure introduces a mass balance approach (MBA) to account for chemically recycled plastic used to make plastic packaging for the purposes of the Plastic Packaging Tax (PPT), effective from April 2027. This also removes pre-consumer waste as a source of recycled content for the purposes of PPT from the same date.
The aim is help to create the right conditions for investment in the chemical recycling sector and support innovation in the UK plastics industry. It is intended to increase demand for chemically recycled plastic by enabling businesses to claim an exemption from PPT when their plastic packaging contains 30% or more recycled plastic.
The removal of pre-consumer waste from the definition of recycled plastic for PPT purposes is designed to address a tax loophole which undermines the environmental objectives of the tax.
Karen Betts, chief executive, of the Food and Drink Federation, said, “It’s good news the government has committed to legislating for mass balance accounting in this finance bill. This means that companies using mechanically or chemically recycled plastic will no longer have to pay as much in the plastic packaging tax.
“It’s also welcome that government will formally consult on the future of the costly, volatile and outdated Packaging Waste Recovery Notes (PRNs) system, and on ensuring councils run efficient, cost-controlled recycling services. To drive real change and value, it’s good to see government again acknowledging the key role of producers in leading the EPR scheme, through a Producer Responsibility Organisation.”
