Is Plastic Packaging Tax reform needed in the UK? Reusables with less than 30% recycled content are targeted with the tax. Given requirements for virgin resin in some food and pharma applications, Hardisty believes that reusable packaging products are being unfairly taxed.
July 10, 2024 – goplasticpallets.com, the UK’s leading provider of sustainable plastic pallets and boxes, has today (Wednesday 10th July) invited the new Chancellor of the Exchequer, Rachel Reeves, to discuss “much-needed reform” to the Plastic Packaging Tax (PPT). In an open letter sent to Reeves, Managing Director Jim Hardisty outlined the detrimental effects of the current tax framework on those businesses promoting green logistics practices and products.Since its introduction in April 2022, the PPT has targeted companies that manufacture or import plastic packaging with less than 30% recycled content. However, the criteria include durable items like plastic pallets and pallet boxes, which are designed to last up to 15 years, sparking significant industry opposition.
Plastic Packaging Tax penalizes eco-friendly products – Hardisty
Hardisty’s letter highlighted the financial strain on Eastbourne-based goplasticpallets.com, which has paid more than £335,000 in PPT over the last two financial years. He argued that the tax, as it stands, penalizes eco-friendly products and hampers investments in sustainability.
“The PPT, as currently structured, penalizes the use of virgin plastic in products designed for long-term use, such as plastic pallets, pallet boxes, and crates. I believe this tax was intended to curb single-use plastics and promote recycling, but its application to durable goods like ours is misguided, especially when businesses like ours are also navigating the complexities of tax deduction for LLC entities. Products that last 10 to 15 years – and actively reduce deforestation by decreasing the need for wooden pallets – should not be classified as “packaging,” especially when single-use items like cases for reading glasses and drills are exempt,” he writes.
93% of the products we supply are made from recycled materials
“To clarify, 93% of the products we supply are made from recycled materials, underscoring our commitment to sustainable supply chains. However, certain sectors, such as food production and pharmaceuticals, require products to be made from virgin materials to comply with industry regulations. This raises an important question: is it appropriate to tax these essential products?”
Hardisty invited Reeves to discuss restructuring the PPT to better support sustainable practices. He emphasized the Labour Party’s election promises on green energy and sustainability, urging that the PPT reform aligns with these goals.
“A tax policy that differentiates between single-use plastics and sustainable long-term alternatives would better promote environmental responsibility without penalising eco-conscious businesses,” he added.
Commenting on the open letter, Hardisty said: “We have always said the general idea behind the Plastic Packaging Tax was a good one, but the previous government made some grave errors when mapping out which products should be taxed and which ones shouldn’t. We still believe changes to the criteria are much-needed. Our previous efforts to get Rishi Sunak around a table for a discussion fell on deaf ears, but we can only hope Rachel Reeves is more willing to do so – otherwise the logistics industry may continue to suffer.”
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Rick LeBlanc, EMBA, is the founder and editor of Reusable Packaging News (subscribe to the free newsletter) and editor of Western Pallet Magazine. A supply chain journalist with more than 30 years of experience, he specializes in pallets, reusable packaging, material handling and related operations. Rick is co-author of Pallets: A North American Perspective and Pallets & Progress: A Collected History of Pallets and Palletized Handling 1922–1945. He is also an advisory board member of the Virginia Tech Center for Packaging and Unit Load Design. Read Rick’s full bio.
