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Treasury Predicts 40% Jump in Recycled Plastic Use With New Tax

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Treasury Predicts 40% Jump in Recycled Plastic Use With New Tax

A plastics packaging tax set for April 2022 will spark an estimated 40% jump in the use of recycled plastic in packaging, according to Treasury predictions.

Chancellor, Rishi Sunak originally laid out plans for the tax, which will be set at £200 a tonne for packaging with less than 30% recycled content, in March 2020.

The Treasury said the tax aims to “increase the use of recycled content in plastic packaging” and estimates the use of recycled plastic in packaging could increase by around 40%.

“This is equal to carbon savings of nearly 200,000 tonnes in 2022 to 2023, based on current carbon factors,” the Treasury said.

“The policy may also help to divert plastics from landfill or incineration, and drive recycling technologies within the UK.”

The Finance Bill 2021 will set out how the levy will be collected, recovered and enforced, as well as the scope of the tax and who will be liable to pay the tax and need to register with HMRC.

“This is a new tax that will apply to plastic packaging manufactured in, or imported into the UK, that does not contain at least 30% recycled plastic,” the Treasury said. “Plastic packaging is packaging that is predominantly plastic by weight.”

It’s hoped the tax “will provide a clear economic incentive for businesses to use recycled material in the manufacture of plastic packaging”, which will create greater demand for this material.

“In turn this will stimulate increased levels of recycling and collection of plastic waste, diverting it away from landfill or incineration,” the Treasury added.

The cost of running the tax is thought to be around £400,000 a year, with estimated capital costs of £10-20 million for developing a new computer service to support this tax, together with £22 million in staff and other resource costs.

The tax is expected to generate revenues of £235 million in 2022/23, increasing by a further £10 million the following year, before falling to £225 million in 2024/25 and £210 million in 2025/26.