A Taxing Time For Supply Chains

The world is currently gripped by economic uncertainty. From President Trump’s tariffs and their knock-on effect on global stock markets to the continuing cost of living crisis – these are nervous times for individuals and businesses alike.

UK companies are feeling the squeeze. The rise in Corporation Tax under the previous government, coupled with the recent hike in National Insurance Contributions from 13.8% to 15%, plus the lower threshold at which employers start paying, has added pressure to already stretched margins. For SMEs especially, these increases make it harder to invest, hire, or grow – and many are now faced with difficult decisions.

For businesses operating supply chains – and those who supply them – it doesn’t stop there. April saw the government roll out its Extended Producer Responsibility (EPR) scheme, which intends to shift the cost of managing packaging waste from local authorities onto businesses.

But here’s the catch: while the policy is aimed at larger producers, suppliers like us remain legally responsible unless the customer appears on the government’s list of registered large producers, or confirms in writing that they’ve reported their data. If they haven’t registered or don’t respond, the obligation stays with us.

That’s not just a significant financial burden (our current estimate is £60,000 per year), but a huge administrative one too. It means chasing down every qualifying customer to verify their reporting status – and picking up the cost when others haven’t complied. It’s hard not to question whether this is another piece of toothless legislation. Without proper enforcement or follow-up from the government, those who play by the rules end up carrying the can.

Although EPR has been on the horizon for some time, its form and direction has shifted repeatedly, with little clarity about what it will actually mean in practice. This messy introduction echoes what happened in April 2022 with the Plastic Packaging Tax (PPT). Over the past three years, we’ve paid hundreds of thousands of pounds in PPT – not for disposable packaging, but for supplying durable, reusable plastic products. These solutions continue to play a vital role within logistics networks, warehouses and fulfilment houses right across the UK.

I’ve always believed that including certain plastic pallets, pallet boxes and crates within the PPT criteria is completely misjudged – and frankly, grossly unfair. In my view, a virgin plastic pallet that’s used in a customer’s operation for 10 to 15 years shouldn’t be considered “packaging”. Switching from wood to plastic in these cases actually helps reduce deforestation and delivers long-term benefits across the supply chain. But despite multiple attempts to engage with the government on this issue, the framework remains unchanged, and the PPT has risen again, now standing at £223.69 per tonne.

It is incredibly frustrating. PPT and now EPR will, fundamentally, be a cost to the business, reducing our margins, and ultimately our profits and cash. This impacts the funds we can allocate to R&D, training, and service improvements.

Ironically, this comes just as we reach a major milestone: recycling 2,000 tonnes of plastic since launching our scheme in 2019. We collect used plastic pallets and boxes – no matter who supplied them – and return them to our specialist recycling centre in Belgium. It’s a proud achievement, and proof that genuine sustainability is possible.

We’re not against legislation – far from it. But if we’re serious about building a true circular economy, we need policies that reward responsible businesses, not punish them. It’s time for the logistics sector to come together and push for a fairer, more effective approach.

Jim Hardisty, Managing Director