What is the Plastic Packaging Tax?

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How prepared are you for the Plastic Packaging Tax? This is probably one of those questions we all like to avoid, but it’s got to be asked.

As Benjamin Franklin said, “By failing to prepare, you are preparing to fail.” And none of us want to fail when it comes to meeting tax obligations and their potential knock-on effects on business. On the contrary, by putting some time in now to prepare, you might find you can actually benefit – and add significant value to your business – from this new and imminent taxation.

But firstly, let’s take a quick look at what the Plastic Packaging Tax (PPT) will mean for your organisation.

What the Plastic Packaging Tax means for you

The PPT takes effect on 1 April 2022. Its overarching aim is to encourage the use of recycled rather than new plastic within plastic packaging. It will apply to plastic packaging manufactured in, or imported into the UK, that does not contain at least 30% recycled plastic, at a taxable rate of £200 per tonne.

You will be liable to register for the PPT if you import into the UK, or manufacture in the UK, plastic packaging or products contained in plastic packaging. Most importantly, you must register even if your packaging doesn’t require you to pay tax. In addition, updates continue to be applied to the Plastic Packaging Tax from HMRC, including recent changes to the ‘PPT Statement’ that you need to be aware of.

Changes to the Plastic Packaging Tax in the Autumn budget

Following announcements on the 27th October, six revisions to Plastic Packaging Tax have been proposed in the Autumn budget include:

  1. To allow HRMC to modify the timing of an import, and the meaning of import and custom formalities.
  2. Ensure that businesses who are below the de minimus threshold, who currently do not have a liability to register, do not have to pay the tax.
  3. Provide tax reliefs for persons enjoying certain immunities and privileges, such as visiting forces and diplomats, ensuring compliance with international tax agreements.
  4. Transfer the obligations and entitlements of PPT group members to the representative member of that group.
  5. Require HMRC to notify the representative of a PPT group of the date that applications for and modification of group treatment will take effect.
  6. Change certain terms used to describe unincorporated bodies to ensure consistency throughout the legislation.

As you can see with PPT, that the legislation is still being discussed. In a nutshell: you need to be prepared and kept up to date.

Prepare to succeed with the Plastic Packaging Tax

One crucial first step is to action an impact assessment across your organisation. This will help you develop a more robust picture of how the tax will affect your business, your operations, your processes.

We’ve devised a handy checklist for actions that can help you get started:

  1. Familiarise yourself with the new rules and obligations
  2. Assess supply chains and who the tax will affect
  3. Consider who will be responsible for the PPT accounting
  4. Establish training needs for staff and systems for compliance
  5. Initiate registration with HMRC and plan for annual registrations and de-registrations
  6. Develop reporting framework and administration for tax returns
  7. Assess any future changes to contracts and pricing
  8. Develop stakeholder communication and prepare reputational management strategy

One additional and vital factor as part of any impact assessment is to research alternative packaging options. The PPT naturally creates an opportunity for your organisation to realise your sustainable ambitions – choices that will save you money, improve your reputation and help preserve our environment. And this is where we can also help.

We’re here to help you prepare – and benefit

Acopia Plastic Packaging Tax eGuide

Acopia Plastic Packaging Tax eGuide

We know the importance that customers place on recyclable packaging. And we can help you make sense of the confusion across the industry and with consumers around the issues of plastics. Furthermore, we can guide you towards solutions that provide real benefits to the environment and to your business, supporting you to make sustainable packaging and process choices that are right for your organisation and reduce your tax liability. For instance, our range of high performance hand and machine pallet wrap reduces plastic wastage by 40% and costs by up to 25%.

By packaging efficiently, you can not only cut costs and time, but you can show you care about your environmental impact and improve your brand reputation and stakeholder relations. So, by planning for the PPT, you can prepare to succeed, with choices that will benefit your whole organisation.

To help you prepare for what the tax will mean for you and how you can benefit, we have created a free eGuide: Is your business prepared for this new taxation?

Download our Plastic Packaging Tax eGuide here

Or get in touch with us using the form below and let’s chat about how Acopia can help you make the best sustainable packaging and process choices that are right for your individual business.

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Can eco-friendly machine pallet wrap save you money?

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It all sounds a bit too good to be true doesn’t it? A new take on what most would see as packaging’s most maligned material – plastic machine pallet wrap. Huge amounts of it are used across the globe every day and we estimate that the UK alone uses over 150,000 tons of pallet wrap every year. It’s hard to imagine what that kind of volume looks like.  And how a product like this could possibly deliver sustainability on any level!

Pallet wrap has been with us one way or another for over 100 years.  As with anything, machine pallet wrap has been subject to development and has continued to evolve to where we are today. But where is that actually? Well, we’re at a stage where some of the pallet wrap being used today is a whole lot smarter, delivering real environmental as well as cost benefits. How’s that? Let’s find out!

Firstly, how can machine pallet wrap be eco-friendly?

Its eco-credentials go hand in hand with its cost-saving properties and it certainly isn’t for commonplace for pallet wrap to achieve these kinds of benefits. iWrap is a high-performance intelligent machine pallet wrap and truly a best in class product. The single-use plastic savings are unparalleled compared to any other pallet wrap on the market today. It’s these plastic savings that have really spoken volumes to brands such as IKEA, Waitrose and ASDA that are committed to reducing the amount of plastic they are using iWrap.

One client we are working with has seen game-changing benefits with 42.13% less plastic going to landfill as well as a reduction of  2,467.2 kgs of cardboard used each year. The graphic below shows everything iWrap was able to deliver for them.

Savings achieved with eco-friendly machine pallet wrap

Savings achieved with eco-friendly machine pallet wrap

 

All this from a simple product change!

Who would have thought this huge reduction in environmental impact could be delivered by a machine pallet wrap! With the Plastic Packaging Tax very much just around the corner now starting in April 2022, it’s important businesses realise and understand the scale of the issue and how this can and will affect them. With a levy of £200 per tonne on all plastic packaging, large users and going to be subject to a hefty tax bill.

The answer has to be to use less plastic. It makes sense financially as well as environmentally. There is also the possibility of exemption if a user can get their plastic packaging consumption to under 10 tonnes. We estimate that if you’re wrapping over 400 pallets a day using a 23-micron machine pallet wrap, you’ll be consuming 23 tonnes of waste plastic a year wrapping your pallets. 

So how could you bring that plastic usage down by over half to under just 10 tonnes? Using iWrap will deliver this staggering plastic reduction whilst still maintaining the same pallet stability, consistent pallet wrapping and damage-free deliveries to your customers – just as you have now, and in most cases better, with the much thicker 23-micron film.  And imagine how delighted your customers will be when receiving pallets from you with that kind of reduction of plastic on your deliveries! You get to deliver a cost-saving to them too!

On average, we see a reduction of 40% or more on the plastic used with iWrap

The video below shows the kind of plastic savings that can be achieved.

So what cost savings can machine pallet wrap deliver?

We saw in the graphic above an example of the types of savings gained from one of our customers using iWrap. Let’s look a little closer at these figures. Of course, the impressive one is the huge saving on the cost of the film alone at £36,120. That’s a staggering amount that any company would be overjoyed to save on their machine pallet wrap spend. The other cost savings are equally important and who wouldn’t appreciate gaining over a week back in time every year?! Imagine the impact of that in a busy warehouse – a 53 week year for the price of 52! Time savings and being able to free up resource is valuable for every business.

On average, we see a reduction of 25% on spend and in reality usually a lot more than this

The savings we have looked at here, combined with the ability to bring your machine pallet wrap usage to under 10 tonnes, avoiding the packaging tax are significant. Also, very large users can reduce their tax liability and end up paying a vastly reduced amount instead.

We did say it sounded too good to be true, didn’t we!

The easy way to understand the plastic and cost reductions for your own business is to get in touch with us for a plastic audit. It’s completely free and is a no-obligation meeting where we come to see your set-up and demo iWrap on your own pallet wrap machine.  You can see for yourself what this high-performance stretch wrap could deliver for your business. We’re always excited to have the opportunity to run these demos,  discovering savings for businesses nationwide. Our clients are pretty excited to see the results too!

So if this all sounds valuable to you, and if your company is committed to reducing environmental impact whilst looking at ways to cut costs – why not get in touch using the form below.

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What’s the best stretch wrap?

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Which Stretch Wrap is Right for my Business?

To understand what makes the perfect pallet wrap or stretch wrap today, it’s worth knowing a bit about the evolution of this material that has become commonplace in every warehouse around the world. Invented over 100 years ago and made from PVC, it saw huge global demand in the ’50s. By the 1970s a wrap was being produced with a 50% stretch, which was a notable scientific achievement for the time. However, the success of the science behind the product was quickly overshadowed. It didn’t work. It wasn’t robust, durable or tear-resistant enough to cope with the rigours of transporting goods – all those features we take for granted with today’s modern stretch wrap.

A new solution had to be found. It came in the form of low-density polyethene. Yes, it was more durable, but this time the drawback this time was it’s “stretchability” – it could only achieve a modest 30% stretch. Another modification later and LLDPE film was born (Linear low-density polythene) and this found its way onto the US market in 1976.

Putting the Stretch into Stretch Wrap

By the late eighties and early nineties, stretch wrap had become the go-to protective packaging component for reliable and durable transportation of goods. Stretch wrap made transporting larger pallets possible and which meant more economical deliveries. So the race was on to develop a wrap that could stretch even further, to deliver even greater economies but with the same reliable performance.

The stretch wrap at this time was made from a single layer of film or a ‘mono’ layer. So this became the starting point in the next phase of its evolution – experimentation with additional layers of film.

As more layers were added, each layer had it’s own unique ‘signature’ in terms of the role it performed. For example, one layer was developed to achieve a greater stretch, another for stability and another for cling – combined these layers were the first example of the stretch wrap used today. It doubled the stretch achieved by the 1970’s version at 100% and this was the start of further experimentation that saw even more layers being added, just like a recipe, with each layer having its own function.

Fast Forward to Today’s High-Performance Stretch Wrap and Pallet Wrap

As you can imagine, this process has been perfected even further and until recently, the most exciting development in stretch wrap was a product called Nano Film which has been available for about 5 years.  This is made up from a 4 layer film structure. In an effort to increase the number of layers, the film is split again and re-joined. And this splitting and re-joining process is continued many times but the major drawback is it still only contains the properties of the 4 original film layers, so it is by nature – restrictive.

iWrap - today's answer to the best stretch wrap

iWrap – today’s answer to the best stretch wrap

Science has come to the rescue again with a next-generation high-performance stretch wrap called iWrap. This Intelligent Pallet Wrap has been developed with 11 layers of film – all of which are produced directly from the extrusion head. This means there is no need to split and re-join the film layers as in the Nano film example.

With iWrap, each layer has its own individual property and function. It truly is a best in class product where you can program in stretch, cling, and tear resistance properties at the point of manufacture according to your specific needs and requirements. Pretty remarkable stuff!

What else can iWrap Pallet Wrap do?

So what does all this technical advancement mean for you as a user? Well, this 11 layered film can save you money, can speed up your palletising and even reduce costs for your customers. Not bad for a roll of humble pallet wrap! So how’s it done?

1. Saving you Money 

On average, you can expect to see a 25% saving in the costs in wrapping your pallets. Even though iWrap has 11 layers, they are incredibly thin so you use less film to wrap each pallet. With up to 300% stretch achievable (remember that early 50% stretch example?) you need much less film to wrap each pallet as well as being able to keep it completely stable.

2. Elimination of Damaged Goods Delivered

No one likes to receive broken and or damaged consignments – it hurts on every level doesn’t it? It’s such a waste of money firstly in terms of damage to the items themselves. Then there is the recovery cost to get it all back to your warehouse and the time taken to process the return and to send out a replica pallet of new goods, with the hope that this time it will reach it’s destination unscathed.

Then there is the cost of a damaged reputation from your customer’s perspective who then have to wait for replacement goods. iWrap has been tested to provide unparalleled load stability and puncture resistance to get your goods to their destination safely.

3. Reducing Costs for Your Customers

Everyone likes to save money – so wouldn’t it be great to be able to say to all of your customers that you can save them money? And that’s without reducing your margins or charging your customers more! With the new plastic packaging tax arriving with us in April next year –  all packaging with less than 30% recycled content will be subject to a levy, a green tax if you like. This is to encourage the reuse of materials and reduce the amount of virgin plastic produced.

Whilst stretch wrap is not available currently with recycled content due to those technical film properties we discussed, being able to use less of it is an advantage. As mentioned before iWrap is extremely thin, even with those 11 layers – and yet is only 12 microns thick.  In comparison, standard stretch films are around 23 microns thick.

So what is the advantage here? This levy not only applies to you, it also affects your customers too and if you’re using less film to wrap your pallets – your customers benefit from a reduced amount of plastic packaging at their end. They win again from this high-performance film with reliable, undamaged deliveries, as well as paying less tax on the waste plastic stretch wrap. In fact, iWrap can deliver on average – a 40% reduction in plastic consumption. That’s news any one of your customers will happy to hear!

 

What’s the Future for Stretch Wrap?

The use and disposal of plastic will continue to be a concern and we should all be looking for ways to reduce the amount we use. iWrap offers the thinnest film available without compromising on stability. With a new version with 500% stretch a possibility in the near future, iWrap will continue to develop to meet the needs of modern businesses. This is great news for every user and end-user throughout the supply chain.

If you want to see iWrap in action in your own warehouse, we often run like for like tests with your own set up so you can see for yourself the physical reduction in plastic used to wrap your typical pallets. Put us to the test, we love the challenge! Companies such as IKEA and Waitrose are already benefitting from cost and plastic reduction using iWrap.

Get in touch using the form below and we’ll run a comparison and measure the savings for you!

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