The taxman has charged Boohoo Group over a lack of certification for its recycled polybag content.
The fashion brand wrote to product suppliers last week saying the charge would be passed on unless they met certain conditions, according to Drapers.
Boohoo was accused by HMRC of breaching recently introduced rules about plastic packaging, meaning items manufactured are subject to tax, unless it can be proved they contain 30 per cent recycled material.
The letter asked suppliers to give polybag details and certification of recycled content certification, as well as confirmation of the percentage of recycled content.
According to Drapers, Boohoo uses a supplier with 100 per cent recycled material and packaging, which “complies with both our ambition and the new guidance”.
“We communicated all of this to our suppliers but provided them with an option of continuing to use their own suppliers, as long as they could certify that the poly bags they use were at least 50 per cent recycled material, made from LDPE (low density polyethylene) only and a number of other standards”, the brand told Drapers,
An HMRC spokesperson said the Plastic Packaging Tax (PPT), which came into force on 1 April 2022 “encourages the use of recycled plastic instead of new material within plastic packaging.
“This will create greater demand for recycled plastic, and in turn stimulate increased levels of recycling and collection of plastic waste, diverting it away from landfill or incineration.
“The Government estimates PPT will lead to around 40 per cent more recycled plastic being used in packaging in 2022/23, compared to not introducing the tax.
“Businesses that manufacture or import plastic packaging can check if they are liable for PPT and how to register by searching ‘plastic packaging tax steps to take’ on GOV.UK.”
Boohoo told City A.M. that it “sourced a nominated global supplier who produces 100 per cent certified recycled material and recyclable packaging” which was “communicated ..to our suppliers but provided them with an option of continuing to use their own suppliers, as long as they could certify that the poly bags they use were at least 50% recycled material, made from LDPE only and a number of other standards.”
“To support them in managing this change we have covered the cost of any HMRC tax payments so far, but to ensure that our suppliers are complying with our UpFront goal: By 2023 all customer garment packaging will be reusable, recyclable or compostable and any plastic used will contain over 50 per cent recycled content, we have been clear that this will become the responsibility of suppliers in the near future.”