HMRC has ditched plans for a plastic tax on silage wrap which would have cost farmers £200 a tonne.
Farming union NFU Scotland (NFUS) says it has received confirmation from the UK Treasury that the plastic film used by farmers and crofters to produce silage bales will continue to be exempt from the Plastic Packaging Tax.
According to NFUS, the Treasury has accepted that whilst silage film falls within the scope of the packaging tax, it is a highly specialised product which is essential to the fermentation process needed to produce silage.
It said this “non-packaging function” meant silage film was eligible for exemption from the tax, and HMRC will shortly publish updated guidance reflecting this position.
“We welcome this decision that properly recognises the integral role that plastic wrap plays in the production of silage,” said NFUS environmental resources policy manager, Sarah Cowie.
“With input prices soaring, avoiding a taxation cost of £200 per tonne of wrap is also very welcome at this time.”
She said appropriate alternatives to plastic wrap have not yet been developed, however farmers and crofters were committed to farming in the most environmentally way and there was widespread industry uptake of schemes to collect and recycle silage film.
“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,” added Ms Cowie.
Scottish Conservative leader, Douglas Ross, welcomed the decision and said: “It was misguided to impose this tax on silage film in the first place given how the agriculture sector plays a very small part in plastic use across the country.
An HMRC spokesman confirmed the tax plans had been ditched and said the decision was made following “careful analysis regarding the unique properties of silage film.”