In response to a government consultation, ICAEW said that while it supported the policy objective of the consultation, the case for mandating a new, universal, supply-chain-wide certification is not clear. HMRC holds very little evidence of widespread fraud, so the scale and location of the problem should be established before any decision is taken.

Plastic packaging tax’s design already protects the revenue, ICAEW said, as the tax is chargeable by default, and the exemption is conditional on evidence. Where a business cannot obtain adequate evidence from its supplier, the tax is due – and whether to pay it, press the supplier for better evidence or change supplier is a commercial decision. A mandatory certification scheme is not needed to secure that outcome but would add further administrative costs and burdens.

The evidence and concerns cited in the government’s consultation paper appear to relate particularly to imported packaging. Any requirement should therefore be proportionate and risk-based, rather than imposing the same burden across all domestic and overseas supply chains.

The Institute also called for a realistic lead time for any changes.

Ed Saltmarsh, ICAEW Tax Technical Manager, said: “We support the aim of ensuring that plastic packaging recycled-content claims are accurate and that compliant businesses are not undercut by unsupported claims. However, a universal mandatory certification requirement is not a proportionate response. Our members report that plastic packaging tax compliance is already disproportionately costly – in some cases the cost of compliance exceeds the tax itself.

“If demonstrating eligibility costs more than the benefit of using recycled plastic, businesses may simply pay the tax, undermining the policy’s purpose. A universal mandate, applied without regard to size or risk, would sit uneasily with the government’s commitment to reduce the administrative burden of regulation on business by 25% by the end of this Parliament.

“Therefore, any requirement should be risk-based, evidenced, and designed to avoid a situation where the cost of demonstrating eligibility outweighs the benefit of using recycled plastic. If certification does proceed, it should build on a competitive market of accredited schemes and bodies, align with and follow the framework being developed for chemically recycled plastic, and allow a realistic lead-in time that does not clash with the other plastic packaging tax changes planned for April 2027.”

ENDS

Notes to editors: