UK businesses double-charged under packaging tax scheme after Packuk error

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.

Benchmark Drinks, which produces celebrity wine brands for Kylie Minogue, Graham Norton and Sarah Jessica Parker, was among those affected. Chief executive Paul Schaafsma said his finance team alerted him after three identical payments totalling about £700,000 vanished from the company’s bank account.

“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.”

PackUK emailed affected businesses on Wednesday saying “urgent action” was being taken and promising refunds “by close of play on Friday December 5”. But as Schaafsma and his team headed out for their Christmas party that evening, no refund had been received.

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.

But producers say the system is far more complex and expensive than ministers suggested, with unclear reporting requirements, uncertain cost estimates and concerns that rising compliance charges will ultimately be passed straight to shoppers.

“The government talks about keeping inflation down,” Schaafsma said, “but the irony is the government is causing more inflation than anybody else with these stealth taxes. There’s no accountability, we’re just told to shut up and pay the bill.”

A spokesperson for the Department for Environment, Food & Rural Affairs said the error stemmed from “an external financial services supplier”, adding: “We recognise the inconvenience this has caused and have processed refunds to all affected businesses.”

Jamie Young

Jamie is Senior Reporter at Business Matters, bringing over a decade of experience in UK SME business reporting.
Jamie holds a degree in Business Administration and regularly participates in industry conferences and workshops.

When not reporting on the latest business developments, Jamie is passionate about mentoring up-and-coming journalists and entrepreneurs to inspire the next generation of business leaders.