✕
☰

The UK Plastic Packaging Tax — are you exempt?

by

Josh Remi, Commercial Manager at ecoveritas advises how the pharmaceutical and medical sectors can prepare for the new tax. 

From retail through to high order goods, food and beverages, the full spectrum of UK industry is preparing itself for the changes ahead of the UK Plastic Packaging Tax. The medical and pharmaceutical sectors are, of course, no exception. 

The Plastic Packaging Tax is effective from 1 April 2022 and applies to all plastic packaging manufactured in, or imported to, the UK. At first glance, it’s easy to dismiss the tax as just another cost to be absorbed, but that’s a matter of perspective. 

As industry moves further towards a circular economy, it’s a strong incentive for companies in every category to start making more significant inroads towards sustainable packaging and ultimately, protect the future of the industry.

So, where does this leave the medical packaging sector?

What is the Plastic Packaging Tax for?

First, it’s important that pharma and medtech companies — no matter their sector or audience profile — have a deep understanding of the tax: what it means, why it’s being brought in and why it matters. We tend to focus on packaging sustainability as an issue for sectors such as grocery, FMCG (fast-moving consumer goods), food and beverages, but the pharma and medical sector also have their own part to play.

Every business that manufactures or imports into the UK 10 tonnes of plastic packaging or more over a 12-month period will need to register its details for the tax with HMRC. Companies will need to pay tax on all packaging that contains less than 30% recycled plastic, charged at £200 per tonne. When we look at the sheer volume of packaging involved in today’s pharma and medtech sectors, this could potentially ramp up overheads significantly.

The tax will be accounted for through quarterly tax returns, with the first return and payment in July 2022. The changes mean that additional data need to be collected, including evidence that packaging includes 30% or more recycled plastic. Calculations must include tonnage of liable packaging, who is liable to pay the tax and any proof of exemptions. Notably, the tax runs alongside the Packaging Waste Regulations, EPR (Extended Producer Responsibility) and DRS (Deposit Return Scheme) costs ... and is in addition to them, not instead of. 

Exemptions for medical packaging

There are certain medical exemptions for the UK Plastic Packaging Tax that are determined by definitions and usage. 

Plastic packaging components will not be chargeable for the tax if it is for use in the ‘immediate packaging’ of a human medicinal product. In relation to a medicinal product, the definition in the Human Medicines Regulation (2012) is “the container or other form of packaging directly in contact with the medicinal product”.1 In those same regulations, medicinal product is defined as:

  1. Restoring, correcting or modifying a physiological function by exerting a pharmacological, immunological or metabolic action; or
  2. Making a medical diagnosis .

As a result, common packaging types such as rigid plastic bottles, sachets, tubes, stick packs and thermo-moulded strip pouches (unit-dose blister packaging) will not be liable for the UK Plastic Packaging tax, unlike outer or secondary packaging layers.

Looking ahead to how pharmaceutical and medical packaging could develop, this may lead to simplification of packaging in applications where this is feasible, switching from multilayer packaging to single layer or perhaps changing materials.

As long as the packaging meets the above criteria, businesses can claim exemption on the ‘immediate packaging’ on pharmaceutical and medical products.

Supply chain responsibility 

Although there are certain packaging exemptions, we cannot forget intralogistics as part of the process.

Packaging such as containers and totes that are commonly used as part of the supply chain, from manufacturing through to last mile logistics, are also considered packaging. As such, plastic containers will also be liable for tax if they do not contain the required 30% recycled plastic content. 

Because of this, we must consider plastic components at all stages of production, including containment, movement, handling, delivery and presentation, which can complicate matters when calculating potential tax outlays. 

Back to topbutton