Amongst different prices which are coming into impact subsequent month, such because the Nationwide Insurance coverage value rise and climbing vitality prices, a Plastic Packaging Tax has been creeping up within the background.
We’re right here to let you know a bit about what it’s and whether or not you’ll want to fear about it.
What’s Plastic Packaging Tax?
Plastic Packaging Tax (PPT) is because it sounds – a levy on plastic packaging. It is advisable register if you happen to’ve manufactured or imported ten or extra tonnes of completed plastic packaging elements inside the final 12 months otherwise you’ll accomplish that within the subsequent 30 days. From April 1, 2022 to March 30, 2023 the 12-month threshold shall be labored out in another way.
PPT solely applies to producers and importers of plastic packaging elements which incorporates 30 per cent or much less recycled plastic. Nonetheless, packaging ought to solely include recycled plastic the place it’s permitted underneath different laws and meals security requirements.
For PPT, all plastic is assumed to be virgin (not recycled) except there’s proof that recycled plastic has been used.
>See additionally: How a lot nationwide insurance coverage hike will price your enterprise
Which packaging is topic to Plastic Packaging Tax?
Let’s speak a bit about what plastic is. Plastic is a polymer materials to which components (e.g. calcium or dyes) or substances might have been added. This doesn’t embody cellulose-based polymers which haven’t been chemically modified.
If you assess the quantity of plastic in your packaging, these components depend. If a plastic packaging element is made up of a number of supplies however incorporates extra plastic by weight – together with the aforementioned components – it is going to be classed as plastic packaging for tax functions. It is advisable maintain a file to point out what substances are in your plastic packaging.
Two forms of packaging topic to tax: packaging designed for use within the provide chain or for single use by the patron. If packaging is made up of a number of elements, you will need to account for PPT on every element. Examples of various elements embody bottles, caps and labels or trays, packing containers and plastic home windows.
Packaging is chargeable when the plastic packaging element is completed if this takes place within the UK, or when completed plastic packaging is imported.
You will need to weigh the packaging you manufacture and export. You will need to know the:
- Weight of the packaging element recorded in metric values — this should be proven in kilograms in your return
- Share of recycled plastic content material
You might also must show {that a} packaging element isn’t plastic.
When do I must register for the tax?
You will need to register for Plastic Packaging Tax inside 30 days of turning into chargeable for it. Bear in mind that you will need to pay the tax on the entire chargeable elements from the day you’re liable to register.
For those who’re not required to register, it’s best to maintain data demonstrating that you just manufacture or import lower than ten tonnes per 12 months of completed plastic packaging, together with crammed packaging.
How do I register for Plastic Packaging Tax?
For those who’re liable, you’ll have the ability to register from April 1, 2022.
To register, chances are you’ll want to supply the next info:
- The kind of enterprise you run
- Your companies handle and make contact with particulars
- The date your enterprise turned chargeable for Plastic Packaging Tax
- An estimate of how a lot completed plastic packaging you anticipate to fabricate or import within the subsequent 12 months
- A buyer reference quantity, which could possibly be your:
- Company Tax Distinctive Tax Reference
- Self-Evaluation Distinctive Tax Reference
- Firm Reference quantity
- Charity Registration quantity
- Nationwide Insurance coverage quantity
- Momentary Nationwide Insurance coverage quantity
For those who’re a non-UK enterprise with no UK institution and wouldn’t have any of the reference numbers listed, you possibly can nonetheless register for the tax. After registering you’ll be given a registration quantity.
The requirement to incorporate an announcement along with your bill to point out that Plastic Packaging Tax has been paid, which was on account of begin in April 2022, shall be delayed. The federal government says that extra details about together with a Plastic Packaging Tax assertion with invoices shall be printed in the end. Register for updates on the federal government web site.
Which data and accounts do I must maintain and for the way lengthy?
You will need to maintain accounts and data to help the knowledge you submit in your quarterly tax returns. You’ve acquired to point out your workings and clarify the way you got here to the figures that you just did. You will need to have data to point out when your packaging incorporates a minimum of 30 per cent recycled plastic or if you’re exempt from the tax.
Your accounts and data should:
- Be stored for a minimum of six years from the tip of the accounting interval in writing (this may be accomplished electronically)
- Report weight in tonnes, kilograms and grams
The place related, your accounts should embody:
The data should be both a doc:
- Used for another tax or responsibility
- Which clearly identifies the elements to be exported, equivalent to a gross sales contract or order
The data should:
- Be dated at or earlier than the time of manufacturing or import
- Embrace particulars which permit the plastic packaging elements you propose to export to be recognized
- Embrace the load of the plastic packaging elements which you propose to export
It’s best to maintain a file of all paperwork you propose to make use of to finish your Plastic Packaging Tax return or declare any credit or exemptions.
Wunwell this have an effect on my tax return?
You’ll have your quarterly tax return as regular, however some additional info will should be included on it.
Listing any packaging elements you’ve reported on a earlier tax return as being supposed for direct export however they:
- Will now be equipped inside the UK
- Haven’t been exported inside 12 months from the date of manufacture
Don’t embody:
- Packaging manufactured to be rail, plane and ship items shops (except customs formalities are cleared and they’re formally imported as not to be used as items shops)
- Plastic packaging elements completely put aside for a non-packaging use
Will I’ve to lift my costs?
For those who pay Plastic Packaging Tax on plastic packaging elements that you’ve got manufactured or imported, you possibly can select to extend the worth you cost for that packaging to assist cowl the price of the tax. That’s totally as much as you, however it may frustrate your prospects and make them look elsewhere. Weigh up the professionals and cons earlier than you go forward.
Plastic Packaging Tax is simply paid as soon as when the packaging element is completed or imported. It isn’t handed down the provision chain as a individually identifiable cost like VAT. VAT will proceed to be payable on the entire value charged for the products you promote in response to VAT guidelines.
>See additionally: Learn how to use MTD to get VAT proper
For those who improve your value of your plastic packaging due to Plastic Packaging Tax, VAT shall be payable on the entire of the brand new value.
The federal government web site has extra detailed info on Plastic Packaging Tax, find out how to measure your plastic packaging and find out how to maintain your data.
Learn extra
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