New Plastic Packaging Tax: what you need to know

On 1 April 2022, the UK introduced a Plastic Packaging Tax (“PPT”), becoming one of the first countries in the world to introduce a tax on virgin plastic packaging. The aim of the tax is to incentivise importers and manufacturers of plastic packaging to use recycled materials in their products.

PPT applies at a rate of £200 per tonne on plastic packaging that has less than 30% recycled content – whether it is manufactured or imported into the UK. It also includes packaging on imported goods.

PPT applies in addition to the existing Packaging Waste Regulations and will usually require additional analysis.

Who needs to pay PPT?

  • Any business that imports plastic packaging or products containing it into the UK, where the amount imported exceeds a threshold of 10 tonnes within a 12-month period, or
  • Any business manufacturing plastic packaging where the amount manufactured exceeds 10 tonnes within a 12-month period.

What is plastic?

Plastic for the purposes of PPT means a polymer material to which substances may have been added, and includes all biodegradable, compostable and oxo-degradable polymers.

Two types of plastic packaging are subject to PPT:

  • Packaging designed for use in the supply chain; and
  • Single-use plastics for end use by the consumer.

Packaging is classified as plastic when the main component, by weight, is plastic.

Plastic packaging containing more than 30% recycled plastic still counts towards the 10-tonne threshold. Returns must include this material, but tax will not be charged on this component.

Are there any exceptions?

Certain types of plastic packaging are not subject to PPT, including those that are:

  • Designed to perform a storage function for the end user;
  • Integral to the goods;
  • Designed to be reused in a display function;

As well as:

  • Plastic containers imported or manufactured to contain human medicine; and
  • Tertiary packaging used in transport e.g. shrink wrap on pallets.

What do you need to do?

  • Determine whether you need to register for PPT. Registration is required within 30 days of meeting or anticipating meeting the 10-tonne threshold. HMRC have produced a handy guide to help businesses understand their responsibilities in relation to PPT: https://www.fdf.org.uk/globalassets/resources/public/general/ptf-060-21-a2.pdf
  • Where applicable, submit quarterly returns to HMRC detailing the quantity and components of packaging used, and pay any tax due.
  • Understand your packaging use: can you accurately quantify all the components in your packaging and how will you collect this data?
  • Understand your supply chain and how suppliers propose to address the new requirements.
  • Determine how you will meet the information requirements for customers in future.
  • Implement any required changes to systems to facilitate data collection and reporting.

If you have a query about Plastic Packaging Tax, contact us today at mail@chiene.co.uk.