The UK Plastic Packaging Tax: Are your SAP systems prepared?

Many retailers use plastic packaging for their products. In an effort to try and tackle single-use plastic waste, the government will introduce a new plastic packaging tax from April 2022.   

This new tax applies to plastic packaging either produced in or imported into the UK that does not contain at least 30% recycled plastic.   
The good news for some retailers is that there will be an exemption for small quantities of plastic packaging.  The not-so-good news for others is that they now need to identify which of their product range has take-home packaging and whether that packaging contains a high proportion of non-recycled plastics. 
The tax will be £200 per metric tonne of plastic packaging that contains less than 30% recycled plastic.  
Any business that manufactures or imports more than 10 tonnes of plastic packaging a year will need to register for the tax. This is regardless of whether they are actually liable to pay the tax or not. And, unless plastic packaging can be shown to meet the recycled content test, it will be assumed that it does not.  
If you manufacture or import less than 10 tonnes of plastic packaging a year, you will still need to keep some records to demonstrate that you are below the tax threshold and check if you become liable in the future. 
The government also recommends that businesses make the Plastic Packaging Taxpaid visible to business customers, in order to encourage the use of more recycled materials.  

A solution to tracking the Plastic Packaging Tax

One of our clients recently asked for our help in this area.  Where and how could they store the necessary article data?  Working closely with the Commercial team, a simple and effective solution was defined. 

For each article, these key questions are used to identify which the new tax will apply to:  

  • Is this product imported? 
  • Does it contain take home packaging? 
  • If yes, are any of the packaging elements plastic?   
  • If plastic, what polymers are used?  What percentage is from recycled plastic? Is documentary evidence held? 

Our solution included key conditional validations so that users were prompted to complete additional fields based on the data input.  In complex cases, multiple plastic components are used in the packaging. Each component comes with its own polymer type, weight, and recycled content. 

To reduce the impact on colleagues maintaining article data unrelated to packaging, a simple report and update program was defined to set initial mandatory fields to a default value. The correct data was collected and maintained on mass at a later stage. 

With our support based on the experience of the PASàPAS team and the systematic application of good practices to design, we build and test to very high standards. We reduce the risk of delivering a result that would not meet expectations. 

Visibility to forecast the financial impact

The benefits to our client include heightened visibility of affected product ranges, the ability to forecast the financial impact of the new tax on the current product range, and an integrated and usable solution requiring little ongoing support from outside of their organisation. 

If you would like to learn more about preparing your business for the new plastic tax, click here to speak with our team.