Understanding the Recent Plastic Tax Changes.
Plastic Packaging tax was introduced in the UK from the 6th April 2022, which is a levy on businesses that import or manufacture plastics (at a 10 tonne threshold for registration) containing less than 30% recycled product for the use of packaging.
This has been brought in as part of the UK’s strategy for Resource and Waste Management which is managed under the Environment Bill, along with the incoming Extended Producer Responsibility Legislation.
It will financially stimulate the infrastructure to enable the sorting and reprocessing of plastic products, with a long term view of allowing us to achieve higher levels of sustainability by recycling and reusing our global resources.
The financial implications, for which our manufacturers are responsible, is an additional cost of £200 per tonne of plastic. We anticipate that this price increase will become an indirect tax on the customer due to the additional costs being passed down the supply chain.
Also anticipated is the impact that this tax will have on the cost of recycled plastic as there is a scramble to produce goods using a larger amount of recycled content which will in turn drive up the prices due to limited supplies. However it may take some time for these increases to come into play, and it is not currently possible to predict the exact cost of this.
Our products that are subject to a direct impact of this tax will include mattress sacks and packaging tape. This is due to them being considered by HMRC as packaging designed as single use consumer packaging – the consumer in this case being the business that uses them.
We have identified that there are differing options available to us in our supply chains as demand for ‘greener’ and more cost effective packaging increases. We are looking forward to working with our customers as we grow towards the ideals of a circular economy, aiming to reduce material use, and increase re usability and recyclability.
Currently we are developing ideas with our suppliers to try and minimise the impact of these increases including by looking at the ways we can adjust our products to use less virgin plastic material in manufacturing.
The quality of the items that we supply has always been at the forefront of our choices, and we are conscious of continuing to give our customers the best products at the best price.
We are committed to improve sustainability but we know that that this cannot come at a cost of giving our customers inferior goods that are less suitable for the protection service that we are all trusted to provide. We are researching into how we can use more environmentally friendly resources, which may have a dual benefits of increasing sustainability whilst providing better economical value, along with continuing to be consistent with our range of quality packaging solutions that meet the needs of our customers.
Plastic packaging tax is part of a whole range of legislative changes that will put the onus of responsible use of resources on the producers. Whilst this has the immediate impact of price rises, it will also allow us to make better decisions for the future with a push for clarity on recyclability and knowledge of product life cycles – of which there currently is very little factual comparable information.