Prime minister Rishi Sunak has today (Tuesday 20 June) been invited by goplasticpallets.com for a serious discussion on reforming the Plastic Packaging Tax (PPT), in a move reflecting increasing frustrations across the logistics industry. Through an open letter, also sent to 10 Downing Street, managing director Jim Hardisty expressed his concerns about the current tax framework, arguing for a reform that wouldn’t unfairly impact businesses contributing towards a sustainable supply chain.
Since its introduction in April 2022, the PPT has been levied on companies that manufacture or import plastic packaging, which does not contain at least 30% recycled plastic. The inclusion of certain plastic pallets, pallet boxes and crates in this tax – items that often remain in the supply chain for up to 15 years – has been met with considerable opposition from the industry.
Hardisty’s letter revealed the strain placed on his company and others in the sector, as a result of what he perceives as a “fundamentally flawed” tax. goplasticpallets.com, well-known across the sector for its commitment to sustainability, had to pay over £180,000 in PPT for the 2022/2023 period alone.
“The current form of the PPT has inadvertently penalised our environmentally-friendly products, making it harder for us to compete and invest in our business and our team. This is why I am calling for a thorough review and reform of the PPT,” he writes.
“Prime minister, I believe that PPT, in its current form, is fundamentally flawed and not fit for purpose. I suggest that it should be scrapped and reintroduced with a clear focus on single-use plastic.”
Hardisty extended an invitation to the prime minister to “discuss how a redesigned PPT could encourage sustainable practices without disproportionately affecting eco-conscious businesses”.
Furthermore, a recent Freedom of Information (FOI) request from goplasticpallets.com revealed that only 3,729 companies signed up for the PPT in its first year – far lower than HMRC’s initial forecast, with Hardisty adding “this vast discrepancy implies either a substantial overestimation of the affected companies or a failure in enforcement and communication”.
Commenting on his invitation to Rishi Sunak, Hardisty said: “I believe that a constructive conversation with the prime minister can lead to positive change for our industry. The current PPT design has unintentionally disadvantaged sustainably-focused businesses like ours. A reform that recognises the difference between single-use plastic and sustainable alternatives is critical to our collective goal of a greener future.”
Unit 6, Alder Close
Rt. Hon. Rishi Sunak MP
10 Downing Street
cc: Rt. Hon. Jeremy Hunt MP
20th June 2023
A request to reform the Plastic Packaging Tax
Dear Prime Minister,
I am writing to you today as the Founder and Managing Director of a company that has, for many years, championed sustainability across the logistics sector.
At goplasticpallets.com, we take enormous pride in the sustainable products we supply, our pioneering recycling scheme which has seen our team recycle over 1,250 tonnes of plastic since 2019, our accreditation from the Environment Agency, and the work we have done with various charities and environmental organisations.
It is with disappointment and frustration that I write to you regarding the Plastic Packaging Tax (PPT), introduced in April 2022 whilst you were Chancellor of the Exchequer. Before the introduction of PPT, I was keen to learn more about this tax and the potential positive impact it could have. However, my initial enthusiasm turned to despondency when it became clear how my company would be penalised for supplying environmentally-friendly products made of virgin plastic.
The PPT applies to plastic packaging manufactured in or imported into the UK that does not contain at least 30% recycled plastic. I concur with the general sentiment across the logistics industry that this tax could have served a meaningful purpose in reducing the use of single-use plastics (such a shrink wrap, water bottles, food packaging, etc) and encouraging recycling.
However, the decision to include certain plastic pallets, pallet boxes and crates is completely misjudged and grossly unfair. In my opinion, a virgin plastic pallet we supply to a customer, which is then used for up to 10 or 15 years within their factory, should not be considered “packaging” – yet a plastic case for reading glasses, or the case a drill is sold and stored in, is exempt.
The current design and implementation of the PPT leaves much to be desired, costing our business unjustly while failing to encourage significant shifts in industry practice.
According to our Freedom of Information request, HMRC anticipated that 20,000 manufacturers and importers of plastic packaging would register for PPT in its first year. However, the actual number fell well short, with only 3,729 registering up to 31st March 2023. This vast discrepancy between expectation and reality implies either a substantial overestimation of the affected companies or a failure in enforcement and communication.
Despite this, HMRC seems to be hitting its revenue target, indicating a larger burden being placed on fewer companies. For transparency, I can reveal we paid £180,173 in PPT for the 2022/2023 period. This is significantly above the average payment HMRC originally expected per company, which indicates an undue burden on some businesses, including goplasticpallets.com.
As previously stated, our products are designed for repeated use over many years, contributing positively to sustainable supply chains and reducing deforestation. They offer a robust, durable, and reusable solution for different businesses. Additionally, our pallets and pallet boxes are 100% recyclable, ensuring a minimal environmental footprint.
The current form of the PPT has inadvertently penalised our environmentally-friendly products, making it harder for us to compete and invest in our business and our team. This is why I am calling for a thorough review and reform of the PPT.
Prime Minister, I believe that PPT, in its current form, is fundamentally flawed and not fit for purpose. I suggest that it should be scrapped and reintroduced with a clear focus on single-use plastic.
I extend an offer to meet with you and discuss how a redesigned PPT could encourage sustainable practices without disproportionately affecting eco-conscious businesses like ours.
Our common goal is to create a greener future. To achieve this, we need a tax policy that distinguishes effectively between single-use plastic and sustainable alternatives. I hope you will consider this appeal seriously and look forward to a positive and constructive dialogue on this matter.
Managing Director of goplasticpallets.com