The tax covers plastic used in packaging in the supply chain and single use plastics for consumers, which includes both domestic and commercial consumers, with less than 30% recycled content. If the packaging is made up of several components then each component will need to be accounted, for example bottles, caps and labels.
Packaging is covered, whether supply chain or single-use consumer packaging, where it is "suitable for use", whether alone or in combination with other products, for the containment, protection, handling, presentation or delivery of goods. The phrasing of this part of the legislation suggests that it will be for a manufacturer/importer using plastic for an out-of-scope purpose to prove that it is not subject to the tax.
Plastic is a polymer material to which additives or substances (for example dyes) may have been added, including biodegradable, compostable and oxo-degradable polymers. Cellulose-based polymers which have not been chemically modified will not be deemed plastics.
As noted above, only "finished" plastic packaging components are subject to the tax.
If packaging is made from multiple materials but contains more plastic by weight, the entire weight of the packaging component will be taxable. According to Government guidance, this means that where a packaging component contains 4g of plastic, 3g of aluminium and 3g of cardboard, the entire 10g component will be counted for the purposes of the 10 tonne annual threshold, and for payment of the tax where applicable. The burden of proving that packaging is not a "plastic packaging component" falls on the manufacturer/importer.
Similarly, even though plastic packaging containing 30% or more recycled material is not subject to the tax, volumes of recycled-content packaging do count towards the 10 tonne annual threshold. This means that a manufacturer or importer of mostly recycled packaging, with small amounts of non-recyclable/lower recycled content packaging, will still have to pay the tax on the latter types of packaging.
Plastic is deemed recycled – for the purposes of assessing the 30% recycled content threshold - when it has been reprocessed from "recovered material" using a chemical or manufacturing process so it can be used for its original purpose or another purpose. It does not, however, include organic recycling, i.e. aerobic/industrial composting or anaerobic/biogasification treatment.
Recovered material is pre-consumer plastic or post-consumer plastic that both:
- is no longer suitable to be used in the process from which it was generated and would otherwise have been used for energy recovery or disposed of as waste, and
- has been collected and recovered for use as a material input for a recycling or manufacturing process, instead of new primary material.