HMRC Releases Plastic Packaging Tax Mass Balance Allowance Draft Policy Papers for Feedback
HMRC have released the first two of six proposed policy papers they would like feedback on.
These are for: 1) implementing a Mass Balance Allowance (MBA) to provide evidence for chemically recycled plastic; and 2) pre-consumer waste will no longer be accepted as a source of recycled plastic – both for the purposes of the tax and now implemented from April 2027!
The two papers are as follows, with a brief description of each:
Definition of Site and Requirements for the Transfer of Credits
With the introduction of MBA, businesses will be allowed to operate a site level mass balance with the option of transferring recycled material credits between sites if the transfer meets the requirements set out in legislation. This paper sets out the proposed requirements for the transfer of credits. The changes to legislation will also need to include a definition of site.
Proposed Compliance Approach (for MBA)
Allowing a MBA to be used subject to third party certification is a novel approach for tax purposes. While certification schemes will be used to assure the provenance of chemically recycled material, HMRC will need robust measures in place to tackle non-compliance and mitigation to guard against any potential tax loss. This paper sets out our proposed high-level approach to compliance and seeks the views and help of the industry to manage and reduce risks to competition and tax integrity.
Feedback is required back to HMRC by Thursday 31 July.
If anyone thinks they can contribute to any of these papers, please contact Steve Morgan (steve.morgan@recoup.org).
For reference, the other papers are:
Circulated by 30/6 for comment by 29/8
- Pre-consumer material and manufacture of films
- Allowable input materials for MBA
Circulated by 31/7 for comment by 15/9
- Draft minimum standards for acceptable certification schemes for PPT MBA
- Draft high-level compliance approach