Hundreds of businesses hit by double charges under new packaging tax scheme

"Nearly 500 companies have been mistakenly charged multiple times under the government's new packaging compliance scheme, after a "technical issue" triggered duplicate direct-debit withdrawals during one of the busiest trading periods of the year. PackUK, the body created to administer Extended Producer Responsibility (EPR) charges, confirmed that 484 producers, around 11 per cent of those registered, saw their packaging-waste payments taken repeatedly without warning. Industry figures estimate the error resulted in hundreds of thousands of pounds being incorrectly removed from business accounts, with some hit for seven-figure sums."

""We're fortunate that we've got a decent amount of cash," Schaafsma said. "But for businesses struggling or tight with cash at this time of year, taking three times your EPR amount is just irresponsible. For some producers it will be millions, and they'll have staff and suppliers to pay. How does this sort of thing even happen? No one else takes a direct debit three times.""

"The blunder is the latest setback for the much-criticised EPR scheme, which many food and drink companies have branded "a stealth tax". Under EPR, responsibility for the full cost of collecting, sorting and recycling packaging shifts from local councils to the companies producing it, a reform intended to incentivise better design and reduce waste."

A technical fault caused duplicate direct-debit withdrawals under the new packaging compliance scheme, affecting 484 producers—about 11% of registrants. Industry estimates place the incorrectly removed amounts in the hundreds of thousands of pounds, with some businesses losing seven-figure sums. Benchmark Drinks reported three identical payments totalling about £700,000. PackUK emailed affected businesses saying urgent action was being taken and promised refunds by close of play on December 5, but some refunds had not arrived by that evening. The EPR system shifts packaging recycling costs to producers, a change many companies have criticised as a "stealth tax".

Read at Business Matters