10 November 2021
The tax will start on 1 April 2022 and HMRC has confirmed that there will be no delay to the implementation date. The secondary legislation has yet to go through Parliament so there may still be changes to the Tax. Following are some answers to queries that relate to the Carton industry.
1. Laminated cartonboard will NOT be subject to PPT as confirmed by HMRC. Please see below.
A: If the packaging component (the laminated material) is not predominately plastic the tax would not be due as it would not meet the plastic packaging component definition from Finance Act 2021 section 48, specifically (3) – A “plastic packaging component” is a packaging component that contains more plastic, when measured by weight, than any other single substance listed in regulations under subsection (7)(a).
2. However, the PPT will apply to the plastic window in a windowed carton if it is not made of a minimum of 30% recycled plastic. This again has been confirmed by HMRC below.
A: The film is a separate component to the box and tax is due on this film. The film is finished for the tax prior to it being glued to the box, similar to a label being finished prior to it being glued to another piece of packaging. The rules around multi-material packaging are for where the materials are combined during substantial modification, such as lamination, resulting in the materials becoming a single component made of different materials.
Please note that the liability to pay the PPT will fall on the manufacturer of the plastic film/window or if the film/window is imported then the liability will fall on the importer.
3. The requirement to show the amount of PPT paid was initially to be shown on invoices from 1 April 2022 but this requirement has now been delayed. As yet there is no date when this will be required.
4. HMRC is still regarding printing as being a “substantial modification” which will mean that any converter who is printing onto plastic will be required to pay the PPT as it will be the last substantial modification and the plastic component will be regarded as being finished. HMRC is still being challenged on this issue regarding printing “substantially” adding to the weight of the plastic component.
5. HMRC has launched a further technical consultation with a closing date of 1 December 2021. The purpose of this consultation is for the government to get feedback on whether the legislation works as intended.