UK govt have announced intention for plastic tax in 2018 but still 83% UK Companies don’t know about this.
Basically the tax is being levied to punish the businesses for using the plastic in packaging and it will provide incentive to the businesses who use recycled or ecofriendly packaging material.
Tax is 200 GBP per tonne of Plastic usage by business. People may expect that because of this tax the cost of products and will increase and it will affect the consumers of UK but the amount of tax is not that much high that it affect the individual family very much.
One thing that you need to understand is that this tax will be levied to businesses only and not levied to consumer as an direct or indirect tax.
So we can say that the tax will not have much economic impact to the UK economy at a macro level but surely it will reduce the plastic usage. HMRC is also expecting a change in the behavior from customer and business side
So we can say the tax will not affect the country and their people much but yes it will surely affect the 20,000 UK Producers and importers. Because there will going to be a separate registration, return filing, keeping separate record etc related rules will be published by HMRC so apart from the tax, businesses will have to take care of these things separately and will be required to train the staff to manage the separate administration of Plastic packaging tax.
HMRC also spending millions of pounds to get prepared for this tax. HMRC is expecting firstly one off expenditure for IT system of 6.59 million and yearly staff cost of 11.36 millon.
Right now no major rules or details have been published by HMRC, they will announce all the details framework of rules in the upcoming Finance act.
Definitions:
- Plastic: a material consisting of a polymer to which additives or other substances may have been added, with the exception of cellulose-based polymers that have not been chemically modified.
- Packaging: all products made of any materials of any nature to be used for the containment, protection, handling, delivery and presentation of goods, from the producer to the user or the consumer. Non-returnable items used for the same purposes shall also be considered to constitute packaging.
- Recycled plastic is plastic that has been reprocessed from recovered material by means of a chemical or manufacturing process, other than organic recycling, so that it can be used either for its original purpose or for other purposes.
But this new tax is there for our environment and to maintain sustainability so hope for the best.
Feel free to drop a comment or contact us for any query.
- Dipan Ghataliya