Plastic Packaging Tax: Sale of Goods Price Clause
This Plastic Packaging Tax: Sale of Goods Price Clause is designed for use by suppliers when selling goods comprising plastic packaging to business customers.
Under Sections 42-85 of the Finance Act 2021, as from 1 April 2022, a supplier who either produces any relevant goods or has such goods imported on their behalf becomes liable under that Act for a new “plastic packaging tax” (PPT). The goods will be relevant for this purpose where they comprise or include any “chargeable plastic packaging component”. That type of component is defined by the Act.
Your business might involve supplying plastic packaging to your business customers – either packaging on its own or as part of other goods or materials.
If that packaging amounts to a "chargeable plastic packaging component” that you produced, you will be liable under the Act for PPT in respect of that component. Even if you are not the producer of the packaging component and have not had it imported for you, and are therefore not liable for PPT on it, you might have purchased it from a supplier who charged you an amount equal to the PPT on it that they had to bear.
Where you are either directly liable for an amount of PPT under the Act (as producer of relevant packaging or by virtue of having it imported) or are indirectly liable ( i.e. under your contract with your supplier) for an amount equivalent to it, if you supply that packaging (or goods including that packaging) to your business customers, you might wish to pass on to them an equivalent amount, i.e. recoup it in addition to the price of the goods rather than absorbing the tax cost.
Whether or not you decide to absorb it, you should include in your sales contracts for any goods comprising or including any chargeable plastic packaging component a suitable clause to take account of the effects and requirements of the plastic packaging tax provisions of the Finance Act 2021, including the requirement to provide customers with certain information.
This Plastic Packaging Tax: Sale of Goods Price Clause can be used when selling relevant packaging. and it should be adapted as necessary to ensure that its content and terminology are consistent with the terms and conditions that you use when selling to your business customers.
It is recommended that you take legal advice generally in relation to the PPT provisions of the Finance Act 2021 and how they do or might affect your business.
This Plastic Packaging Tax: Sale of Goods Price Clause is designed to be used only when supplying business customers, not consumer customers. However, where you are directly or indirectly liable for PPT on any packaging and you do not simply absorb that tax cost but instead increase your price to consumers to reflect that cost, you should consider what if anything you should include in your terms of sale in relation to that increase.
Optional phrases / clauses are enclosed in square brackets. These should be read carefully and selected so as to be compatible with one another. Unused options should be removed from the document.
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