Plastics: Taxation

Treasury written question – answered on 22nd July 2020.

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Photo of Alec Shelbrooke Alec Shelbrooke Conservative, Elmet and Rothwell

To ask the Chancellor of the Exchequer, if he will make it his policy to expedite the bringing forward of legislative proposals for a plastic packaging tax as a result of the (a) fall in global oil prices and (b) the rise in the level of production of virgin plastic in order to protect the financial viability of recycling companies in the UK.

Photo of Kemi Badenoch Kemi Badenoch The Exchequer Secretary

At Budget 2020, the Government announced key details of the world leading Plastic Packaging Tax, which will help to tackle the pressing issue of plastic waste. The initial rate of the tax will be £200 per tonne and it will be paid by manufacturers and importers of plastic packaging that contains less than 30% recycled plastic.

The Government is continuing to monitor both the global oil price and recycling capacity in the UK. The Government expects the tax to create greater demand for recycled material and in turn stimulate increased levels of recycling and collection of plastic waste. Since the announcement of the tax at Budget 2018 there has been increased investment in the UK’s recycling capacity, partly due to the tax.

The Government has set a rate of £200 per tonne for the tax as this is expected to make using recycled plastic the most cost-effective option for a business in many cases. Following its introduction in April 2022, the rate will be kept under review to ensure that the tax remains effective in increasing the use of recycled plastic in plastic packaging.

The Government is now consulting on the detailed design and implementation of the tax, and will publish draft primary legislation before it is included in a future Finance Bill, followed by draft secondary legislation and guidance. It is right that the Government consults on the detail of the tax in this manner to make sure it works as intended and that businesses are given time to prepare.

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