Plastic packaging tax: how businesses could benefit

2 minutes to read

In 2019, the government held a consultation on its plans to introduce a world-leading tax on the production or import of single-use or low recycled content plastic from April 2022. Hundreds of responses were received and a further consultation, followed by draft legislation, is promised for 2020. We have examined the proposals and considered their implications – and benefits – for businesses.


Currently, over two million tonnes of plastic packaging is used in the UK each year, the vast majority of which is made from new, rather than recycled, plastic. This packaging makes up 44% of all plastic used in the UK, and 67% of plastic waste: unsustainable figures in the long term.

The environmental disadvantages of non-recycled plastic packaging are numerous. For a start, it requires unnecessary resource extraction and processing, leading in turn to increased energy use and higher levels of toxic emissions. Excessive plastic waste is produced, which is either incinerated – resulting in further emissions – or sent to landfill.

Previously, businesses have cited higher costs for recycled plastic, and significant variations in these costs, as factors in their decision not to commit to using recycled plastic on a regular, long-term basis. In introducing the new tax, the government’s intention is to offer a strong economic incentive for businesses to opt for recycled materials in the production of plastic packaging: not sporadically, but sustainably.

Our Tax Consultant, Kirsty Horobin, explains: “The idea behind this tax proposal is to encourage businesses to rethink the materials they use when producing plastic packaging, hopefully leading to a widespread move towards recycled plastic. This greater demand for recycled materials should, over time, lead to increased instances of collection and recycling of plastic waste, boosting the recycling market and resource productivity.

“Anyone who would like to know more about the potential changes the tax could make to their business, including any initial short-term costs they may face, is encouraged to seek professional advice well in advance of April 2022.”

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