M&S is facing a £40m recycling-tax bill, adding to the mountain of costs it already faces from the Budget.
The food and fashion giant estimated annual bill derives from packaging levies that will start from October, according to two sources familiar with the costs.
The levy is designed to lower the amount of unsustainable packaging created by UK retailers, the Financial Times reported.
It is predicted to make as much as £2bn per year from the industry, according to the British Retail Consortium (BRC).
In November, retailers wrote to Chancellor Rachel Reeves calling for a delay to the implementation of the packaging levies, with its previous 2024 launch date having already been delayed once.
As part of the tax, known as the Extended Producer Responsibility (EPR) scheme, companies must pay for the household packaging they create and which consumers need to dispose of.
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The sales from the levy are sent to local authorities, although they are not specifically ringfenced for recycling.
The letter said: “The sheer scale of new costs and the speed with which they occur create a cumulative burden that will make job losses inevitable and higher prices a certainty.”
M&S declined to comment on the matter.
It comes as M&S already faces £120m in costs from the October Budget, with the wider sector preparing to face £2bn in payments.
In January, the retailer’s CEO Stuart Machin pledged to avoid “big job losses” despite the looming cost pressures it faced.
The executive said: “I do not see in M&S big job losses. We’re a growing business. We’ve got lots to do.”
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