Plastic tax making twine producers uncompetitive

Uncertainty surrounding a plastic packaging tax introduced in 2022 has created an uneven playing field for netwrap and baler twine prices.

The £210.82/t tax, which is levied on all plastic goods that don’t contain at least 30% recycled polymer, adds about £4.20 to the cost of a 20kg pack of heavy twine and about £6.50 to a 3,000m roll of netwrap.

See more: Government urged to scrap proposed plastic tax on silage wrap

But not all manufacturers or importers are paying this tax, either because they are exempt due to falling below the 10t/year threshold, or because they incorrectly consider the products to be exempt.

“Everybody who supplies plastics to the farming industry is responsible for declaring them correctly,” said one supplier, who requested not to be named.

“We believe that only one or two producers/distributors are paying the tax and this is making responsible producers uncompetitive.”

Farmers and wholesalers are also urged to be vigilant in order to reduce the risk of being held jointly and severally liable or secondarily liable for tax.

Silage wrap – whether bale or clamp – is exempt because its primary purpose is for fermentation, but netwrap and baler twine are taxable.

Despite the fact that silage wrap is exempt, it still counts towards the 10t threshold, as does any packaging containing 30% or more recycled plastic.

The approximate size of the UK market for heavy baler twine is 7,500t, which should raise about £1.58m in tax.

Netwrap use is about 4,100t, worth approximately £880,000. However, HMRC reporting combines all plastics and environmental taxes, so it is unclear how much is being declared.

While the tax raised is not ring-fenced for environmental services, taxes do support innovation in waste management and recycling, said an HMRC spokesman.

Any businesses which have made a mistake on their tax return should correct this as soon as possible.

Those who have deliberately failed to register could face a prison term of up to 12 months, a fine of up to £20,000 and/or three times the potential tax lost.

For guidance, visit Packaging in and out of scope of Plastic Packaging Tax at gov.uk or contact HMRC for advice.