BHETA’s lobbying campaign – joint with members – aimed at making DEFRA rethink its Extended Producer Responsibility (EPR) scheme in terms of proposed targeting, scope, and costs has seen its first result, a somewhat revised tariff level that will see an annual saving of £4.1 million* extrapolated across the BHETA membership, compared to the figures announced in August.
Will Jones, BHETA’s Chief Operation Officer, commented, “The new reduced tax rates announced by DEFRA in September are a great first step and very much in the right direction, but it is only a first step. The jump in costs for all product suppliers who use packaging is still eyewatering, rising to an annual (revised scheme) £12.5M* from the current £1.7M of packaging tax under the current PRN scheme. Also, the targeting of suppliers and own label retailers – and no-one else – is still inequitable. I welcome this news on tariff reduction, but the campaign is still very much on. We need acknowledgement of the wider issues and the remaining rise in costs which is huge and unsustainable.”
The EPR scheme is an additional tax, which targets branded product suppliers and retailers of own label goods. It represents a shift in financial responsibility for the treatment of household waste and packaging, moving it 100% to suppliers and retailers. To date, the cost of domestic kerbside recycling disposal is split roughly as follows: 10% by producers through PRNs; 10% by retailers; 80% by the taxpayer through Councils. Under EPR, this will change to the whole cost of collection and disposal met by own label retail and branded goods suppliers through modified PRNs.
Packaging producers affected and required to provide packaging data accordingly are any business, subsidiary or group that is not a charity, with annual turnover over £2m and responsible for more than 50 tonnes of packaging in a calendar year will receive their new EPR tax bill in October 2025. Any business with turnover of £1M plus and responsible for 25 tonnes or more of packaging in a calendar year must report their detailed EPR data.
Thanks to business lobbying activity by individuals and trade associations such as BHETA, the reduction in tariffs now announced by DEFRA includes a proposed 27% reduction in the Intermediate “Paper or Board” packaging charge, and a 17% reduction in the Intermediate “Plastic” packaging charge.
Will Jones commented, “As we can all see the potential saving is not insignificant and I’m delighted with the impact of BHETA lobbying so far. We will however be keeping the pressure on DEFRA and urge all members to continue doing the same. The hike in costs is still very high despite DEFRA’s backdown to date.
“We also still have the unfair targeting issue to address as UK producers are being asked to pay the price of processing all products sold into the UK, from both UK and overseas suppliers. BHETA’s position is that the cost of treating packaging put into the UK by overseas companies should be paid for by the overseas companies. But as that is impossible to enforce due to national boundaries, the UK consumer will continue to fund the treatment of such packaging.
“Collectively, we must keep on talking to Government. The reality is that notwithstanding this welcome tariff reduction, UK suppliers will either have to pass costs up the supply chain to retailers and ultimately consumers, adding to pressure on inflation, or face being wiped out as no longer economically viable businesses.”
The BHETA campaign
BHETA is urging all its members to do the following as soon as possible:
- Using your last full year bill for 2023, calculate your forecast bill for 2025 under these new proposals. (Members who belong to BHETA’s own scheme run by Wastepack can contact sr@bheta.co.uk to have this calculation done for them.)
- Write to your local MP making clear the implications for your business of the new bills and urging them to take up your case with DEFRA.
- Write to DEFRA sharing the impact on your business: The Rt Hon Steve Reed OBE MP, Secretary of State for Environment, Food and Rural Affairs, Seacole Building, 2 Marsham Street, London, SW1P 4DF.
- Write to the Department of Business & Trade sharing the impact on your business and urging them to take up your case with DEFRA: The Rt Hon Jonathan Reynolds MP, Secretary of State for Business and Trade, Department for Business and Trade, Old Admiralty Building, Admiralty Place, London, SW1A 2DY.
- Write to the national media sharing your story.
BHETA can supply an advisory pack and template letters to assist rapid action.
Will Jones concluded, “Making packaging more sustainable is essential. BHETA acknowledges the issues and the need for suppliers to step up accordingly, but EPR’s current targeting and proposed rates are unworkable. They ignore imports, and they ignore the essential role of packaging for the protection of goods, the communication of safe usage and returns instructions and the promotion of best practice vis a vis healthier eating, safe electrical, battery, chemicals disposal and so on. All of these are essential for the end user as well as the supply chain. We are asking Government to unpick the proposed legislation in favour of something more equitable, more practical, and more motivational for everyone involved.”
For more information on BHETA lobbying and legislative advice contact BHETA Member Services on 0121 237 1130 or via www.bheta.co.uk.
*BHETA calculated the packaging tax payable by 17 random smaller members under the current PRN system and under DEFRA’s indicative EPR rates published in August and revised in September. Extrapolating the average rates to the full BHETA membership shows that BHETA members paid £1.65m in tax under the PRN system in 2024, which would have risen to £16.6m under EPR using the August figures, but which has since reduced due to lobbying to £12.5m using the latest September EPR figures.