Plastic Packaging Tax
Posted on: 28 Jun, 22
To pay PPT or not to pay PPT? That is the question that Oury and Clark are grappling with at the moment.
Clark, thank god you’re here, I’m tied up in knots.
Take a breath Oury, you look fit to burst, tell me what’s the issue? A problem shared is a problem halved.
No, it’s nothing like that, I’m wrapped up and confused about this PPT.
Ooh, I’m not the right person to help, I’m no good at presentations, in fact I’m pretty rubbish with computers full stop.
NOT PowerPoint Clark! I’m struggling to get my head around this new-fangled Plastic Packaging Tax.
Ah, I see, what do you need to know?
Everything, literally everything. I’ve gone into wholesale and I need to know if I’m liable to get clobbered with a big bill.
Well, first things first, the tax kicks in for businesses who have imported 10 tonnes of plastic packaging in the last twelve months, or will do so in the next 30 days.
Ten tonnes, is that a lot?
It’s about 130,000 standard bin liners worth, enough to cover 17 football pitches, 639 tennis courts or…
…clear up the empties from a Downing Street party?
I’m not sure about that, you should really be recycling your empty bottles, cans and plastics you know Oury. And it turns out that the government agrees.
Really?
Oh yes, take this plastic packaging tax, components containing 30% or more recycled plastic are not chargeable for it.
So if I use largely recycled stuff then it’s plain sailing?
Not quite, you are still going to have to keep records of everything to prove whether you are able to claim any exemptions for the tax and the recycled plastic content if 30% or more used in any imported component is classed as recycled.
OK, so I keep these records in the same way I keep my financial information?
Now you are getting the hang of it, but now comes the tricky bit, well tricky bits.
It gets trickier from here?
Just a little, but a bit of effort could well save you money (and help the planet) in the long run.
So what’s the catch?
Well, you need to work out what is considered plastic…
Well I’ve got a pretty good idea about that.
for the purposes of the PPT.
Ah, I see, the devil is in the detail – I hate detail.
I know, but you need to ensure you aren’t liable by accident
How so?
Well, for example, if the packaging you are using is made of multiple materials then you need to work out if plastic is the biggest material by weight.
So a plastic is…
A polymer, to which additives or substances may have been added, yes, although cellulose based polymers that haven’t been chemically modified, won’t count as plastic for the purposes of the tax.
I’m getting really stuck on all this detail you know Clark.
I’m glad that you mentioned sticking, if any adhesives are included in the packaging then you need to check to see if they count as plastics too. I wouldn’t want you coming unstuck legally speaking.
Cripes, this is very complicated.
I know, but fear not, I’ve put together a handy survey which can help us to help you and take you through all the ins and outs of the packaging that are relevant to you without keeping you wrapped up all day.
That’s very generous of you
Not at all, and there are several exemptions to the tax, the Government has a handy overview here
The important thing is that you are able to keep and maintain accurate records throughout your supply chain, whether you are importing toothpaste or bananas.
How did you know? I’m actually importing banana flavour toothpaste. Hold on, did you say accurate records throughout your supply chain?
I’m afraid so, which means there could be a sizeable amount of due diligence required to determine where the liability falls.
When you say sizeable?
The HMRC guidelines suggest that any checks should be relevant, reasonable and proportionate.
What does that mean?
Well it really depends on your individual circumstances but if you are an importer or a purchaser of plastic packaging components containing less than the 30% recycled threshold you should consider carrying checks such as:
Requesting confirmation of the tax status from the supplier of the plastic packaging components
Easier said than done
Quite, you should also get signed documentation from the supplier confirming that the PPT has been properly accounted for. And you should get product specifications for any and all of the packaging components, including weight and composition.
OK, that should be fine, I guess.
HMRC will also expect you to carry out physical checks to ensure the real components match the written specs, especially if you are claiming that PPT is not payable due to the fact that the packaging contains more than 30% recycled plastic material.
I’m sure I’ve got some pretty sensitive scales around here somewhere. But hold on, does that mean I have to do the same if my lovely toothpaste packaging is using more than 30% recycled plastic components?
Not quite, but HMRC will be expecting you to do solid due diligence.
Such as?
Benchmarking the price paid for the packaging components against market value. If the components are offered at well below market value, find out the reason.
If things look too good to be true…
then they probably are. Exactly right, you should also be getting copies of any audits or certifications that have been conducted on the suppliers or the reprocessors of the recycled materials. You should also be checking against other public domain information such as customer or supplier websites & brochures, available product specifications and any other sales or marketing information you can lay your hands on. Finally…
I know what’s coming, I’m going to need an auditor aren’t I?
That you are, just to be sure you should be conducting audits and even physical inspections (if your liability is big enough) to prove information provided by suppliers or customers.
I can’t help but think this would all be a lot easier on the blockchain you know Clark
Do you even know what the blockchain is?
Not really, but I’d like to.
Well, we will have to look into that won’t we. But for now…
I’ll get the scales out, you ring the auditors.
Disclaimer
We are but two fictitious characters throwing out ideas and comment to stimulate debate and collect information. As professional service firms, we are open-minded people and think independent thought and debate are essential to help us understand as well as navigate complex problems. By joves – doing business across Europe (and the world) is set to become a whole lot more complex in light of recent seismic political events. As businesses – we provide information and hopefully some wisdom – and we see this blog and its caricatures merely as a much more fun, perhaps slightly controversial, way of stimulating debate and collecting ideas. We’re searching for some true pearls of wisdom, and as we find them, we’ll share them with you.
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