Other announcements - plastic packaging tax

Plastic packaging tax

A new plastic packaging tax will take effect from 1 April 2022 at a rate of £200 per tonne.

This will apply to plastic packaging produced in, or imported into, the UK that does not contain at least 30% recycled plastic. 

The lead time is intended to give those businesses affected time to adapt.

The Government intends to publish draft legislation later this year for consultation, which will address an exemption for producers and importers of small quantities of plastic packaging, as well as how the tax will be collected, recovered and enforced.

Red diesel relief

From April 2022, the Government will remove the entitlement to the use of red diesel and rebated biofuels although exceptions will be in place for agriculture, rail and for non-commercial heating. 

There will also be a consultation on whether the exceptions should be widened to include other specific industries.

The measure is aimed at incentivising business to move to greener alternatives.

Small brewers’ relief

The Chancellor expects the results of the review into small brewers' relief will be published in the spring.

Aggregates levy

The Government will freeze the aggregates levy rate in 2020/21 and will publish its next steps as part of the comprehensive review of the levy.

Climate change levy 

As previously announced, the Government’s intention to make gas and electricity rates equal by 2025. 

In order for the UK to meet its net-zero commitment, the Government recognises that it must continue to remove incentives to choose gas over electricity. 

With this in mind, the rates on electricity are being frozen, while the rate on gas will rise to £0.00568/kWh in 2022/23 to £0.00672/kWh in 2023/24.

Landfill tax 

Landfill tax is charged in England and Northern Ireland on material disposed of at a landfill site. 

It aims to encourage recycling and composting, and to minimise material going to landfill. 

Standard and lower rates are being increased on 1 April 2020 by RPI as follows:

Material sent to landfill Rates from 1 April 2019 Rates for 1 April 2020
Standard rated £91.35/tonne £94.15/tonne
Lower rated £2.90/tonne £3.00/tonne

Housing co-operatives

Two new reliefs were announced: 

  • Qualifying housing will be exempt from the annual tax on enveloped dwellings (ATED).
  • The 15% stamp duty land tax flat rate will not apply to housing co-operatives on purchases of dwellings over £500,000.

The stamp duty land tax relief in England and Northern Ireland will take effect from Autumn Budget 2020 and the UK-wide ATED relief from 1 April 2021, with a refund available for 2020/21.