UK plastic packaging tax requires return, even if NO tax is due

Around 20,000 UK manufacturers and importers of 10 or more tonnes of plastic packaging – over the last year – need to register for the new UK plastics packaging tax and submit returns, even if they do not need to pay any tax, and with the first liability date on the 1st May 2023, there’s not much time.

Announced in the 2020 Budget, the Plastic Packaging Tax (PPT) is an environmental tax that came into force in the UK on 1st April 2022 and applies at a rate of £200/tonne on plastic packaging with less than 30% recycled plastic, manufactured or imported into the UK, including packaging on goods which are imported.

The PPT is a financial incentive to increase use of recycled plastic and will apply to companies that produce or import more than 10 tonnes of plastic packaging, containing less than 30% recycled plastic, over a 12-month period. 

The tax is applied in the first instance to the packaging manufacturer, if based in the UK, but there is a secondary liability, meaning that if the tax has not been paid by the manufacturer, the tax can be passed down to other stakeholders in the supply chain, such as the brand owner or final product manufacturer.

Exempt businesses:

  • Produce or import less than 10 tonne of plastic packaging in a 12-month period
  • Plastic packaging contains 30% or more recycled plastic content
  • Packaging is made of multiple materials of which plastic is not the heaviest

Exempt products:

  • Immediate packaging of licensed human medicines
  • Transit packaging used to wrap imported goods, such as pallet wrap
  • Packaging for goods in transit, which are not released into the UK
  • Packaging for export within a year
  • Components for non-packaging or durable applications, such as CD/DVD cases

ANY business that imports plastic products above the 10 ton threshold – even if they meet the 30% recycled threshold, will need to register for PPT and keep records for their quarterly tax return, as plastic packaging is assumed to NOT meet the recycled content test unless it can be proven otherwise.

Accounting records (kept for six years) should show:

  • Total amount in weight and a breakdown by weight of the materials used to manufacture plastic packaging, excluding packaging which is used to transport imported goods.
  • Data and calculations used to determine if a packaging component is, for the most part plastic, and how much recycled plastic it contains
  • Weight of exempted plastic packaging and the reason for the exemption

RESOURCES

Check if you are liable and need to register for Plastic Packaging Tax
Register for Plastic Packaging Tax

To discuss your PPT situation, exemptions and compliance, please EMAIL Matt Fullard, who can take you through the implications.