Budget 2018: tax on plastic packaging to boost recycling

In his Budget, Chancellor Philip Hammond has promised to introduce a plastic tax that will apply to all produced or imported packaging that does not include at least 30% recycled content

This levy is designed to encourage businesses to ensure that more packaging can be recycled and to ensure that more recycled content is used.

The Treasury has not confirmed the timing of the measure or given details on how much the levy would be, instead saying that the government will consult on the reforms shortly.

The Budget also saw the announcement of £20m to tackle plastics and boost recycling, £10m more for plastics research and development and £10m to pioneer innovative approaches to boosting recycling and reducing litter, such as smartbins.

In his bid to tackle plastic waste, the Chancellor has backed off a tax on disposable cups, concluding that a levy on cups would not be effective enough in encouraging widespread reuse. Businesses are already taking steps to reduce the impact of disposable cups with offices supplying reusable bottles and coffee chains offering discounts to customers who supply their own cup. The government has said it will return to the issue of disposable cups if sufficient progress is not made.

Jayne Harrold, PwC’s UK environmental tax leader, said: 'The introduction of a new tax on the manufacture and import of plastic packaging with recycled content of less than 30% is a welcome move in promoting a change of behaviour to encourage the redesign of packaging and promote the use of recycled material. The measure is planned to take effect from 1 April 2022, this three-year time lag is to give businesses time to adapt and redesign their products.

‘Given the broad public support for plastic tax measures, it’s a surprise to see rejection of visible consumption taxes on targeted items which are used on the go - the infamous latte levy. This seems like a missed opportunity to lead the pack and stimulate change.

‘We’ve been here before with the plastic bag tax. There was constant pressure on retailers to deal with the problem voluntarily, but it was only when the tax was introduced that large scale reform was achieved, reducing our average use from 140 down to 19 plastic bags per year.’

Report by Amy Austin

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