One third of Midlands firms yet to register for plastic packaging tax

By Sam Pither

14 July 2022

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Phipson described the lack of a "modern, long-term, robust" industrial strategy as the UK’s economic "achilles heel".

Recent research by accountancy and business advisory firm BDO LLP has suggested that a third of affected mid-sized businesses in the Midlands are yet to register for the plastic packaging tax (PPT).

Since 1 April 2022, companies importing or manufacturing more than 10 tonnes of finished plastic packaging, such as drinks bottles, ready meal trays or bubble wrap, which contains less than 30 per cent recycled plastic must register for PPT or risk failing to pay tax and subsequently incurring penalties.

While the majority of those still to register state they are actively monitoring the levels of finished plastic packaging they are either importing or producing, a concerning 26 per cent say they have not considered the PPT.

The delay in uptake may be explained by data released by HMRC before the PPT was introduced, which showed that 59 per cent of businesses surveyed said they did not know the average proportion of recycled plastic content they handled, nor the proportion of their plastic which met the minimum 30 per cent recycled plastic content needed to be exempted from the PPT.

It also cited cost as the primary factor driving the amount of recycled plastic in products.

Chris Morgan, Tax Director at BDO LLP, said: “Three months on from the introduction of the Plastic Packaging Tax, there is still some way to go, both in terms of the number of registrations needed, and also the varying states of readiness businesses are in with respect to understanding the requirements of the new tax and the practical changes needed.

“The tax brings a heavy burden of proof from capturing exact data when it comes to record keeping requirements, to obtaining the correct information from overseas suppliers. This is proving to be a very time-consuming exercise.

“Given that the aim of the tax is to reduce the use of virgin plastic and to encourage recycling, businesses should also be considering whether they can switch to non-taxable packaging, whether plastic or not, with R&D tax credits available for such initiatives.”

By Sam Pither

Sam is the Regional Editor of Biz News, responsible for both Hampshire and Dorset.

A new recruit to journalism, Sam started writing for the Business Magazine as a freelancer in May of 2022 after completing his degree in English at University College London. His passion for local businesses and ability to tell a story soon caught the attention of the publication’s management team and have led to his meteoric rise.

Sam, who lives in central Reading, takes a particular interest in technology, gaming and food and drink, having been a chef before starting his degree.