At Budget 2018, the UK Government announced its intention to introduce a new tax on businesses producing or importing plastic packaging. Following this, HM Treasury (HMT) launched a consultation exercise concerning the new tax in February 2019.
During the consultation period, the government engaged directly with over 200 organisations. This included manufacturers, retailers, environmental charities and other experts to discuss the consultation in more depth.
Following the consultation in May, HMT published a summary report of responses to the consultation (here). HMT now intends to move ahead with the tax, with the new Chancellor announcing next steps at Budget 2019. These are expected to include HMRC issuing a technical consultation document on the tax and publishing draft legislation in 2020.
The purpose of the tax will be to incentivise businesses to use recycled material in the production of plastic packaging, so that it creates greater demand for this material. Increased levels of recycling and collection of plastic waste will divert it away from landfill or incineration. The tax is planned to take effect by April 2022, giving businesses time to change processes and manage costs.