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UK postpones invoicing deadline for new Plastic Packaging Tax

The UK has delayed the invoicing deadline for its new Plastic Packaging Tax. In terms of the original guidance, applicable manufacturers or importers must include a statement with their invoice showing they have paid the Plastic Packaging Tax. The original deadline was April 2022. According to the new guidance, the invoicing deadline is now delayed.  

The UK Plastic Packaging Tax in a nutshell

The new Plastic Packaging Tax is designed to incentivise companies to use recycled plastic. Any company that manufactures or imports 10 or more tons of plastic packaging in a 12 month period will have to register for the tax. The tax kicks in when a company uses less than 30% of recycled plastic. In such cases, a rate of  £200 per metric ton of plastic packaging applies.

Note that the new tax will not apply to all plastic items, such as certain medicinal items. Exemptions also apply if you are exporting plastic packaging. Businesses should thus consult a  specialist if they are uncertain of their potential liabilities and opportunities.  

Record keeping is key

The UK government advises any company that manufactures or imports plastic to keep comprehensive records detailing their potential tax liability, or proving that they are not subject to the plastic tax. 

The tax takes effect in April 2022. Businesses should therefore consider preparing now to prevent noncompliance issues. 

Plastic packaging taxes in Europe

The EU has also implemented a tax on non-recycled plastic. However, many Member States postponed implementation due to the economic pressure of the Covid pandemic.

Spain has, however, signalled its intention to implement the tax on single use plastic. 

Companies that manufacture plastic packaging in Spain, or import plastic into Spain, should pay careful attention to new developments. 

Flexible compliance solutions for a changing world

The 21st century presents new challenges for businesses and lawmakers. From environmental taxes to VAT on digital services, governments are constantly adapting regulations to meet new realities. 

Vatglobal’s powerful VAT compliance technology makes record-keeping and compliance fast, simple and efficient. It’s a simple solution to the complex problem of global VAT compliance.

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