Plastic film, used by many farmers and crofters to produce silage bales, is to be exempt from the proposed plastic tax, Her Majesty's Treasury (HMT) has confirmed.

Key stakeholders were informed today (Thursday, January 27) and official guidance will be published tomorrow.

A spokesperson for Her Majesty's Revenue and Customs (HMRC) said:

“Following careful analysis regarding the unique properties of silage film, HMRC can confirm that although silage film is within scope of the tax, it falls under an existing exemption in Finance Act 2021 for packaging that is permanently set aside for a non-packaging function (section 52(6)(a)).

“The intention of this exemption is to exclude items from the tax which meet the definition of a packaging component but are manufactured or imported for a different primary purpose.

“HMRC will shortly publish updated guidance which will reflect this position.”

Plastic tax

Under the proposed plastic tax, plastic wrapping used by farmers was to lose its existing exemption from April 1, 2022. It is estimated by the National Farmers' Union (NFU) Scotland that this would cost farmers an additional £200/t of wrap.

As farming organisations and stakeholders have been calling for the previous exemption to remain, it will be welcomed by many.

NFU Scotland’s environmental resources policy manager Sarah Cowie said:

“We welcome this decision that properly recognises the integral role that plastic wrap plays in the production of silage. With input prices soaring, avoiding a taxation cost of £200/t of wrap is also very welcome at this time.

“Appropriate alternatives to plastic wrap have yet to be developed but farmers and crofters remain committed to farming in the most environmentally friendly way. That sees widespread industry uptake of the schemes already available to collect silage film from farms, crofts and collection centres and recycle it.

“More widely, NFU Scotland would like to see support for research and development of affordable and technically suitable silage films for the future produced with more recycled plastic content or produced from alternatives to plastic.”