From John Lewis to SMEs: The Real Impact of New Packaging Taxes
The headlines last week about John Lewis almost tripling its losses will have caught the attention of many. Buried in the number was a point that matters to all businesses using packaging in the UK: a large part of those losses was driven by new packaging taxes and levies. John Lewis disclosed that it has recognised the full annual cost of the packaging producer levy in its half year results – a hit of around £29m.
This isn’t just a problem for big retailers. The Plastic Packaging Tax and the wider producer responsibility rules are now a fact of life for any business that manufactures, imports or fills packaging. Rates have gone up, reporting has become more onerous, and HMRC are already assessing businesses who they say should be registered and paying. We are currently acting for clients in precisely this position, including in an appeal before the First-tier Tax Tribunal against both a requirement to register and an assessment raised by HMRC.
The difficulty is not just the tax itself but the complexity. Businesses are being asked to evidence recycled content levels, trace supply chains and keep detailed records. Many are finding that what they thought was exempt is being challenged, and that HMRC are quick to issue assessments where the data is incomplete. For finance teams, there is also the impact on cash flow and reporting – costs being recognised up front, even though they may stretch across the year.
The lesson from John Lewis is clear: these rules are not background noise, they can move the dial on profit and loss. For smaller companies the relative impact is even greater.
If you are not certain whether your packaging is caught by the rules, or if you have received a notice or assessment from HMRC, it is important to take advice early. We can review your position, help gather the right evidence, advise on exemptions, and if necessary, challenge HMRC’s view. We also work with clients to plan ahead – whether through design changes, sourcing decisions or compliance systems – to reduce exposure over the longer term.
If this is an issue you are facing, or might face, please do get in touch.
How can we help?
If you are facing a packaging tax assessment from HMRC, are unsure about your reporting obligations, or want to reduce your future exposure, our specialist regulatory and tax team is here to support you.
We regularly advise businesses on compliance, exemptions, challenging HMRC decisions and putting in place practical systems to stay ahead of these evolving rules.
For further advice and assistance on packaging tax or HMRC issues, please do not hesitate to contact Peter Hastings at peter.hastings@rogers-norton.co.uk
For more information on our legal services or to arrange an appointment with a member of our team, contact us at 01603 666001, email enquiries@rogers-norton.co.uk or complete the ‘Request a Consultation’ enquiry form on our website.
*This article is provided for general information purposes only and does not constitute legal or any other professional advice.