HMRC urged to remove silage wrap from proposed plastic tax
25th January 2022
The National Sheep Association (NSA) is urging HMRC to reconsider and remove silage wrap from the plastic packaging tax due to come into force from the 1st April 2022.
At a time when costs are increasing for farmers, adding yet another cost such as this will contribute to further reduction of already low farm business margins, and may lead to unintended consequences, NSA has warned.
HMRC published guidance in December 2021, stating that silage wrap would now be in scope for the plastic packaging tax (PPT), which is due to come into force in spring of 2022.
This is an apparent change to what had previously been discussed. In consultations last year, Defra had classed silage wrap as a ‘product’ not ‘packaging’, as it is not used to transport goods or products from the producer/manufacturer to the final seller/retailer. The Packaging Recovery Note (PRN) regulations also do not define silage film as packaging.
NSA chief executive Phil Stocker commented: “NSA is extremely disappointed that HMRC has changed their position on this.
“The potential additional cost of PPT on silage wrap to UK farmers is estimated to be equivalent to an extra 10% in costs. That in itself is bad enough at a time when most inputs costs are increasing but it’s made even worse by new trade deals with countries that are not subject to the same costs. These trade deals will prevent the option of simply passing additional costs on to the consumer.”
The tax could even have a detrimental effect on actions to collect and recycle plastic, he added.
“The Agriculture Plastics Environment scheme provides farmers with a solution for environmentally responsible management of non-packaging agricultural plastics and to increase the quantity and quality of plastics collected. The voluntary scheme enables silage wrap to be collected at a cost of £60/tonne and a very high number of livestock farms are managed in a way where there is no immediate solution to reduce the use of silage film.”
Whilst the NSA acknowledged the need to reduce plastic use, it noted that current technology does not enable the production of silage wrap with a 30% recycled content to be able to properly ferment the grass. NSA is therefore calling for silage wrap to be exempt from PPT, at least in the interim, while alternative systems or suitable products are developed.
