Plastic Packaging Tax Raises £200 Million | UK Government Must Reinvest Into Recycling Infrastructure

Plastic Packaging Tax Raises £200M

A Freedom of Information (FOI) request uncovered that the Treasury has amassed over £200m from the Plastic Packaging Tax (PPT) .

Duo UK, a packaging manufacturer from Manchester, has called on the government to use this revenue to invest in the UK’s recycling infrastructure.

After successfully submitting an FOI request regarding the PPT, Duo UK discovered that the tax had accumulated in excess of £200m in its revenue. The information pertains to the initial complete three quarters of the tax (April to December 2022), with companies now preparing their last quarterly return for the period January to March 2023.

The First Three Quarters of PPT

The three-quarters data from the FOI request uncovers that:

• Companies have contributed £200,125,000 to PPT revenue. An estimate by HMRC in a policy document projected that the tax would generate £235m in its inaugural 12 months.
• The average tax revenue for each of the three quarters was £66.7m. If this trend carries into the final quarter, the total PPT revenue for the first year could exceed £266m.
• Approximately 1 million tonnes of plastic packaging were subjected to the £200 per tonne tax, packaging which did not contain a minimum of 30% recycled plastic content.
• Companies declared over 254 million tonnes of plastic packaging. 61% of all declared packaging was exempt from the tax, with a significant portion of this packaging containing 30% or more recycled plastic.

During the third quarter (October to December 2022), 3,220 companies completed PPT returns. This is a 38% increase compared to the 2,328 companies that submitted returns in the tax’s first quarter.

Zoe Brimelow, a director at Duo, expressed, “The Plastic Packaging Tax is set to raise more than £266 million in its first year, which would exceed its target by £30 million. It’s an intriguing question how the Government will allocate this revenue.”

She also added that once the costs are covered, there might be a surplus of around £220m from this essentially new source of income.

Reinvestment In Recycling

The industry has been vocal in its demand for investment into the UK’s recycling infrastructure.

Brimelow went on to state that it’s too soon to judge the success or failure of the tax. The fact that first-year revenues are poised to surpass projections does not necessarily indicate that the tax isn’t promoting the increased use of plastic packaging containing at least 30% recycled plastic. On the contrary, the initial revenue projections might have been conservative.

She also pointed out a significant increase in the number of organisations filing PPT returns since the first quarter, attributing this to the growing awareness of the Extended Producer Responsibility (EPR) policy. This policy, set to be implemented this year, is encouraging more businesses to consider their packaging compliance.

Let’s Recycle It

At Let’s Recycle It, we welcome the prospect of government reinvestment into recycling infrastructure using PPT revenue. We work closely with businesses everyday to promote sustainable and profitable recycling, so we see very clearly the opportunity this £200M presents.

This revenue has the potential to give the boost to the UK’s recycling infrastructure that it desperately needs. As a company deeply involved in the recycling sector, we believe that reinvestment of these funds would greatly improve the capacity, efficiency, effectiveness and scope of recycling processes, benefitting both the economy and the environment.

Let’s Recycle It is therefore backing the call made by Duo UK and the wider industry. We hope that this large sum, which essentially is a new source of income for the government, could be channelled into the recycling infrastructure to boost its capacity, improve its technology, and encourage more businesses to consider their packaging compliance, thus driving the country towards a more sustainable future.

We firmly believe in the potential of the Plastic Packaging Tax to encourage greater use of recycled plastic in packaging. Seeing the revenue used to enhance recycling in the UK would be a fitting and forward-thinking application of these funds. As the dialogue around the Extended Producer Responsibility policy heightens, it’s an opportune time for businesses to think about their packaging compliance. A stronger recycling infrastructure, supported by this tax, could help to make that a more viable and attractive option.With this in mind, those of us here Let’s Recycle It will be keenly watching how the government plans to allocate the tax revenue. If directed correctly, it could prove a significant catalyst in the UK’s journey towards sustainability.