Plastic Packaging Tax Guide
Does your business manufacture or import lots of plastic packaging components (or import goods in plastic packaging)? Then you may need to register for the Plastic Packaging Tax (PPT), which was introduced by the UK government in April 2022. Currently, it’s estimated to affect around 20,000 businesses across a wide range of sectors.
If your organisation manufactures or imports a high volume of goods in plastic packaging and isn’t yet registered for the tax then you’re in the right place. This page includes all the plastic packaging tax guidance you need to understand the new tax and work out whether your company needs to register or not.
Find out more about how the plastic packaging tax works, who it applies to, and what your business needs to do with this detailed guide. To speak to someone directly for further help and advice call 0800 211 8390 or contact us online with your query.
What is the
plastic packaging tax?
The plastic packaging tax is a relatively new tax introduced by the UK government on April 1st, 2022. It applies to any business that manufactures or imports 10 or more tonnes of plastic packaging annually that contains less than 30% recycled plastic. It aims to encourage the use of more recycled plastic packaging by UK businesses.
The current rates of PPT are:
- £200 per tonne from 1 April 2022
- £210.82 per tonne from 1 April 2023
Any organisation that meets the criteria must submit quarterly returns to HMRC about their plastic packaging usage. These need to detail the weights of plastic packaging components imported into the UK or manufactured in the UK containing 30% or more recycled content, and/or any that is exempt.
Plastic packaging types
covered by the tax
All types of plastic packaging that contain less than 30% recycled content may be subject to the PPT. According to the UK government, plastic refers to ‘polymer material to which additives or substances may have been added’. Chemically modified cellulose-based materials – like cellulose acetate – are also considered plastic.
The plastic packaging tax applies to two main types of plastic packaging – that used in a supply chain or for single use by consumers:
- Plastic packaging used in a supply chain – any product designed for use in the supply chain, from the manufacturer of the goods to the consumer. The packaging can be used alone or combined with other products. It must contain, protect, handle, present, and/or deliver the goods.
- Single-use consumer plastic packaging – any single-use product for consumers that contains, protects, handles, presents, or delivers the goods for waste. These products are used by the consumer rather than in the supply chain.
Examples of consumer goods covered by the PPT include cling film, bin bags and party cups. Bioplastics – including biodegradable, compostable and oxo-degradable polymers – are also subject to the tax. You can find out more with the government guide to packaging subject to the plastic packaging tax.
Who must register for
the plastic packaging tax?
Businesses that must register for the plastic packaging tax include importers of filled or unfilled plastic packaging and UK manufacturers of plastic packaging. However, you only need to register for the plastic packaging tax if you place more than 10 tonnes of plastic packaging onto the UK market.
According to HMRC, the tax applies when the plastic components are finished. This means when the last substantial modification to the plastic packaging or component is made. It’s the final change to the packaging component’s nature that affects its shape, structure, thickness, and/or weight. It could also be the last modification before the packaging is filled with goods.
So, any business that completely manufactures plastic packaging will be liable and must register for the tax. Importers may also need to register. For example, with any plastic packaging imported into the UK containing goods or products, the tax applies to the packaging at the point of importation.
Any business that manufactures or imports plastic packaging that’s less than 10 tonnes a year doesn’t need to register for PPT. However, you must keep records of the packaging manufactured and/or imported. If you’re an end user of plastic packaging, you’ll likely pay some or all the plastic packaging tax indirectly. Suppliers may pass on additional costs the tax imposes.
Plastic packaging tax exemptions
Businesses that manufacture or import less than 10 tonnes of plastic packaging per year are currently exempt from the plastic packaging tax in the UK. You must keep a record though. Any plastic packaging made from more than 30% recycled content is also exempt from the tax but must still be recorded.
According to the UK government, there are four categories of plastic packaging tax exemptions. These are any plastic packaging that’s:
- Used for the immediate packaging of licensed human medicine
- Permanently recorded as set aside for non-packaging use
- Used as transport packaging to import multiple goods safely into the UK
- Used in aircraft, ship, and rail goods stores
However, both plastic packaging used for human medicinal products and permanently recorded as set aside for non-packaging use apply to the total weight of packaging manufactured or imported. The other two categories of plastic packaging tax exemption don’t need to be included when working out the total weight of packaging manufactured or imported.
How to register for the
plastic packaging tax
To register for plastic packaging tax, you need information about how much finished plastic packaging components you:
- Plan to manufacture or import in the next 12 months
- Have manufactured or imported in the last 12 months
- Expect to manufacture or import in the next 30 days
As well as this vital information, you also require the following details:
- Your business type
- Address and contact details of your business
- A customer reference number. This could be:
- The company registration number
- Your National Insurance number and Self Assessment Unique Taxpayer Reference
- A charity registration number
- The Government Gateway user ID and password of the person or organisation you’re registering. If you don’t have one you can create one when you register (and may be asked questions about the tax records of the business when registering).
For further help and plastic packaging tax guidance call 0800 211 8390 and speak to one of our friendly experts. Or contact us for a callback or assistance online. We can also help with your packaging recycling and disposal needs.
Plastic packaging tax FAQs
How much is the plastic packaging tax?
Currently, the plastic packaging tax charges are:
- £200 per tonne from 1 April 2022
- £210.82 per tonne from 1 April 2023
Am I liable for plastic packaging tax?
You’re only liable to pay plastic packaging tax if your business manufactures or imports 10 or more tonnes of plastic packaging annually (containing less than 30% recycled plastic). PPT only applies when the plastic components are finished, so you may not always be liable as an importer. However, the costs of PPT might trickle down to your organisation anyway.
How do I avoid the plastic packaging tax?
An easy way to avoid being liable for the plastic packaging tax is to ensure all packaging you manufacture and/or import is made of more than 30% recycled plastic. The tax aims to increase the amount of recycled packaging used by organisations in the UK, so changing your packaging supplier or manufacturing process is a good place to start.
You can also avoid the plastic packaging tax by reducing how much you manufacture or import to less than 10 tonnes of plastic packaging per year.
Is plastic packaging tax tax deductible?
You can claim tax back as credit if the plastic packaging components are:
- Exported by you or another business in the future
- Converted into different chargeable plastic packaging components
You must have evidence of the exportation or conversion, showing it took place, and on the return when you have received it. Any credit must be claimed within two years of the components being manufactured or imported. And all credits are applied to the total amount of Plastic Packaging Tax you owe.
Does the plastic packaging tax apply to multi-material products?
The plastic packaging tax applies to multi-material products if plastic is the single largest material by weight. For example, packaging made from:
Plastic packaging tax will apply as this is classed as 10 grams of plastic because plastic is the largest material by weight. If plastic isn’t the largest weight (should there be 3 grams of plastic to 4 grams of paper and 3 grams of aluminium), then the tax doesn’t apply.
Are multiple-use items subject to the UK plastic packaging tax?
According to HMRC, items like totes and other rapid transfer port (RTP) containers are types of packaging suitable for use in the supply chain – which are taxable. Picking bins also class as part of the supply chain, meaning the plastic packaging tax applies to them as well.
Products that count as long-term storage aren’t subject to the plastic packaging tax, such as a protective case (with or without foam). But any packaging on or in the case that’s discarded after the sale (like a temporary plastic film) classes as packaging and is taxable.
Which countries have a plastic packaging tax?
The UK, Spain, and Italy are currently the main three countries that have a plastic packaging tax in operation. However, while the UK introduced a plastic packaging tax in April 2022 and Spain started its own tax in January 2023, the Italian plastic packaging tax has been postponed until further notice.
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