What Is the UK Plastic Tax, and What Does It Mean for You?

On April the 1st, 2022, the United Kingdom government will be bringing into effect the previously announced ‘plastic packaging tax’. This is a charge applied to any company that has manufactured or imported ten or more tonnes of plastic packaging within the previous twelve months, or who plans to do so in the next thirty days. Here’s everything you need to know about the tax, and how you can save on your tax bill while becoming more environmentally focused.

What is the plastic packaging tax?

This is a tax that will be applied to the around 20,000 businesses in the UK that manufacture or import ten tonnes of plastic or more per year, for packaging purposes. That can include purely plastic packaging, packaging that incorporates plastic as part of the design (cardboard boxes with plastic windows, for example), consumer-facing packaging, and products used purely in the supply chain.

Every business that fits that criteria will have to register for the plastic tax. Those businesses that use plastic packaging that contains at least 30% recycled plastic, however, will not have to pay any duty on that plastic – although it will still count towards the total tonnage. If that sounds like your company, you will be charged £200 per tonne of plastic manufactured or imported that contains less than 30% recycled plastic. You can find the details of the UK plastic packaging tax on the government website, here.

What is the purpose of the plastic tax?

In the current way of doing things, around 80 million tonnes of plastic packaging is produced every single year – a figure that some expect to have tripled by 2050. 95% of our current plastic output is ‘single-use’; between 8 and 12 tonnes ends up dumped in the ocean every year (that figure and current trends mean that in less than thirty years, there will be more plastic in the ocean than there are fish). This kind of production and waste is not sustainable – the effect on marine wildlife, the global food chain and the general environment is extreme.

The plastic packaging tax is a key part of the UK government’s commitment to promoting a more sustainable way of living. This commitment includes the five-year, £60 million programme known as the smart sustainable plastic packaging challenge, as well as the cross-industry UK Plastics Pact, and it is not so much about penalising those that use non-recycled plastics as it is a way of incentivising better behaviours. There are options available to every business when they choose the plastic that they use or make, and the tax is intended to push those businesses towards making the sustainable choice and using environmentally-friendly packaging.

The estimated impact of the plastic packaging tax is an increase in the usage of recycled plastic of 40%. That’s equal to nearly 200,000 tonnes of carbon savings per year (based on current carbon factors).

How can you avoid paying the tax?

There are two basic options for businesses that qualify for the tax. Firstly, they can reduce the amount of plastic that they import or manufacture, replacing it with other less environmentally damaging products like glass or paper. Secondly, they can choose plastic that is a minimum of 30% recycled, and thus not have to pay any penalties for the packaging.

At CEAE, we manufacture 100% recycled plastic packaging, specifically for fashion, garment and textile companies. We collect the plastic that has already been used, recycle it and manufacture new polybags of different sizes and thicknesses as specified by our customers.

What are the benefits?

For your bottom line, you get the immediate benefit of avoiding the plastic packaging tax. You also get to promote yourself as environmentally friendly, or a user of sustainable packaging – something that is being increasingly valued by end-users to the point that they are often prepared to pay a premium. You can also improve your finances by simply reducing the amount of packaging that you use – consider how necessary to your product and your brand that each piece of labelling, tagging, and other packaging actually is.

On a purely ethical basis, using recycled plastic is the right thing to do. There can be no doubt in anyone’s mind that plastic waste and waste, in general, is destroying our planet. When we use plastic and then discard it, it sits in landfills or gets incinerated – it becomes waste in the truest sense, and devastates the atmosphere and the environment. Instead, when we recirculate those products, we are not taking additional resources from the planet, and we are not polluting either.

About CEAE

CEAE is dedicated to building, facilitating and promoting the circular economy. This methodology represents a seismic shift in the nature of industry – from the way we manufacture goods, to how we ship them, to how we consume them. The circular economy is all about taking waste out of the process – so as a global society we rely less on taking limited resources from the planet, and more on the materials that are already in the system.

For us, that means recycling and reusing the materials used in the global garment and textiles industry. Our packaging (bags, boxes, care labels, clothing/brand labels) is all made from sustainable materials, and we are certified by the GRS (Global Recycled Standard) to supply our products to businesses in the UK and globally.If you operate in the fashion, garment or textiles space, and need further advice or support on moving toward a more sustainable way of operating (and avoiding the new plastic packaging tax), then get in touch with CEAE today.

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