Plastic tax on silage wrap adds to farming costs

The addition of silage wrap to the list of products attracting the new £200 a tonne plastic tax set to be introduced at the beginning of April this year has created a storm of protest from farming organisations who claim the move is ill-targeted and will threaten rural businesses.

Sarah Cowie,of NFUS
Sarah Cowie,of NFUS

All the farming unions, including NFU Scotland along with the National Sheep Association (NSA) have been lobbying HMRC to have the product excluded from the plastic packaging tax.

They claim that it would only add to the price of silage wrap which had already risen dramatically on the back of higher energy and raw material costs.

In an apparent change to what had previously been discussed, HMRC published guidance on the issue in late December 2021, stating that silage wrap would now be in scope for the plastic packaging tax.

This was contrary to Defra’s opinion, which during consultations in 2021 classified silage wrap as a ‘product’ and not ‘packaging’ due to the fact it was not used to transport goods or products from the producer/manufacturer to the final seller/retailer. NFU Scotland said that it had addressed the issue direct with the Treasury, pointing out that the wrap was currently exempt under other government regulations - given that it was not a form of packaging but part of the production process.


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It also pointed out that there was no alternative currently available for making the huge quantities of grass and other silages which supported the country’s livestock over the winter and reduced the need for imported feeds such as soya - and added that a large proportion of the product was recycled.

"The timing of this unexpected announcement, without prior consultation with industry, does not give either the agricultural or plastic industries much time to adjust, and comes at a time of soaring on-farm input costs,” said the NFU Scotland’s Sarah Cowie.

Calling on HMRC to reverse their decision, she said that while farmers were committed to farming in the most environmentally friendly way, silage wrap which used sufficient recycled material to escape the tax had not yet been developed.

The NSA said that at a time when costs were increasing across the board, an additional tax would contribute to a further reduction of already low farm business margins, and could lead to unintended consequences.


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“The potential additional cost of PPT on silage wrap to UK farmers is estimated to be equivalent to an extra 10 per cent 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,” said NSA chief executive, Phil Stocker.

He added that the competitive advantage offered to farmers in other countries would prevent UK farmers from passing additional costs on to the consumer.

However, at a parliamentary debate last week in Westminster on the tax, despite being accused of “sneaking out” the guidance on adding silage wrap, the Treasury minister, Helen Whately MP, resisted calls for it to be excluded from the tax.


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