Amongst different prices which can be coming into impact subsequent month, such because the Nationwide Insurance coverage worth rise and climbing vitality prices, a Plastic Packaging Tax has been creeping up within the background.
We’re right here to inform you a bit about what it’s and whether or not it is advisable to fear about it.
What’s Plastic Packaging Tax?
Plastic Packaging Tax (PPT) is because it sounds – a levy on plastic packaging. That you must register if you happen to’ve manufactured or imported ten or extra tonnes of completed plastic packaging elements throughout 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 accommodates 30 per cent or much less recycled plastic. Nevertheless, packaging ought to solely comprise recycled plastic the place it’s permitted below 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 online business
Which packaging is topic to Plastic Packaging Tax?
Let’s discuss 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 embrace cellulose-based polymers which haven’t been chemically modified.
Once you assess the quantity of plastic in your packaging, these components rely. If a plastic packaging element is made up of a number of supplies however accommodates extra plastic by weight – together with the aforementioned components – will probably be classed as plastic packaging for tax functions. That you must preserve a report to indicate 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 buyer. If packaging is made up of a number of elements, you need to account for PPT on every element. Examples of various elements embrace bottles, caps and labels or trays, 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.
It’s essential to weigh the packaging you manufacture and export. It’s essential to know the:
- Weight of the packaging element recorded in metric values — this should be proven in kilograms in your return
- Proportion of recycled plastic content material
You might also need to exhibit {that a} packaging element isn’t plastic.
When do I must register for the tax?
It’s essential to register for Plastic Packaging Tax inside 30 days of changing into answerable for it. Bear in mind that you need to pay the tax on the entire chargeable elements from the day you’re liable to register.
If you happen to’re not required to register, you need to preserve data demonstrating that you just manufacture or import lower than ten tonnes per yr of completed plastic packaging, together with crammed packaging.
How do I register for Plastic Packaging Tax?
If you happen to’re liable, you’ll be capable of register from April 1, 2022.
To register, you might want to supply the next info:
- The kind of enterprise you run
- Your companies deal with and get in touch with particulars
- The date your online business turned answerable 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
- Non permanent Nationwide Insurance coverage quantity
If you happen to’re a non-UK enterprise with no UK institution and shouldn’t have any of the reference numbers listed, you’ll be able to 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 indicate that Plastic Packaging Tax has been paid, which was as a result of start 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 revealed in the end. Register for updates on the federal government web site.
Which data and accounts do I must preserve and for a way lengthy?
It’s essential to preserve accounts and data to assist the data you submit in your quarterly tax returns. You’ve received to indicate your workings and clarify the way you got here to the figures that you just did. It’s essential to have data to indicate when your packaging accommodates at the least 30 per cent recycled plastic or while you’re exempt from the tax.
Your accounts and data should:
- Be stored for at the least six years from the tip of the accounting interval in writing (this may be completed electronically)
- Document weight in tonnes, kilograms and grams
The place related, your accounts should embrace:
The data should be both a doc:
- Used for another tax or responsibility
- Which clearly identifies the elements to be exported, resembling a gross sales contract or order
The data should:
- Be dated at or earlier than the time of manufacturing or import
- Embody particulars which permit the plastic packaging elements you plan to export to be recognized
- Embody the burden of the plastic packaging elements which you plan to export
It’s best to preserve a report of all paperwork you plan 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 have to be included on it.
Record any packaging elements you’ve reported on a earlier tax return as being meant for direct export however they:
- Will now be provided throughout the UK
- Haven’t been exported inside 12 months from the date of manufacture
Don’t embrace:
- 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 boost my costs?
If you happen to pay Plastic Packaging Tax on plastic packaging elements that you’ve got manufactured or imported, you’ll be able to select to extend the worth you cost for that packaging to assist cowl the price of the tax. That’s solely as much as you, however it might frustrate your clients and make them look elsewhere. Weigh up the professionals and cons earlier than you go forward.
Plastic Packaging Tax is barely paid as soon as when the packaging element is completed or imported. It’s not handed down the availability chain as a individually identifiable cost like VAT. VAT will proceed to be payable on the entire worth charged for the products you promote in line with VAT guidelines.
>See additionally: How you can use MTD to get VAT proper
If you happen to enhance your worth of your plastic packaging due to Plastic Packaging Tax, VAT shall be payable on the entire of the brand new worth.
The federal government web site has extra detailed info on Plastic Packaging Tax, how one can measure your plastic packaging and how one can preserve your data.
Learn extra
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