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Are you ready for the Plastic Packaging Tax?


If you manufacture or import 10 or more tonnes of plastic packaging within a 12 month period, you may need to register for the tax.


From April 1st 2022, a new tax on plastic packaging comes into force in the UK. If you are a business that manufactures or imports plastic packaging, including if you import packaging which already contains goods (such as plastic bottles), you must check if you are liable for PPT. 

You will have 30 days to register for the tax from the date you become liable but nobody will need to file a PPT return or pay the tax until July 2022 at the earliest, however you may need to register before this point.    

Businesses over the registration threshold who already include recycled plastic in their packaging will still need to register but will not pay any tax.

The Plastic Packaging Tax (PPT) is not primarily about revenue creation, it’s aim is to reduce the use of new plastics and increase plastic recycling.
 

How much will PPT cost and what do businesses have to do?

PPT will be charged from 1 April 2022 and potentially everybody from the largest plastic packaging manufacturer to the corner shop customer buying a packet of sweets, will be affected. Although PPT will be applied to manufacturers and importers of ten metric tonnes of plastic packaging or more annually, the cost may well be passed along the supply chain to consumers and end-users.

The rate of the tax will be £200 per metric tonne of plastic packaging and most businesses will need to register for the tax even if all the packaging contains more than 30% recycled plastic.

You will need to keep detailed records of the packaging you manufacture or import whether you are registered for PPT or not. Plastic packaging is assumed to not meet the recycled content test unless it can be shown that it does.

If you are a business that supplies recycled plastic, your business customers may want more information from you about the types and quantities of material you supply to them.
 

What products will be affected?

Plastic Packaging Tax will be due on finished plastic packaging components manufactured, or imported into the UK, in which less than 30% of the plastic is recycled plastic.

This includes imports of packaging which already contain goods, such as plastic bottles filled with drinks. Where the packaging you import already contains other goods, the tax only applies to the plastic packaging itself.

Find out more about liable products HERE
 

There are several types of products where Plastic Packaging Tax will not be charged regardless of how much recycled plastic the packaging contains. There are 3 categories of products which are not chargeable because they are specified in the law as not being classed as a packaging component for the purpose of the tax, these are items:

  1. where the packaging function is secondary to the storage function
  2. where the packaging is an integral part of the goods
  3. designed primarily to be reused for the presentation of goods

Find out more about exempt products HERE
 

For plastic packaging included or manufactured for export, tax can be deferred for up to 12 months providing requirements are met. If the packaging is exported within the 12-month period, the liability for Plastic Packaging Tax is cancelled.

Find out more about exported products HERE

 

The next steps for businesses –

Businesses who manufacturer or import plastic packaging MUST consider how PPT will affect them and will need to understand that not all the effects will be financial. There will be additional records and data required and this could impact staffing.

Importer Responsibility: Businesses who import plastic packaging need to check who is responsible for complying with and paying PPT.
In most cases this is unlikely to be the suppliers - For example:

  • a UK based retailer imports goods from a German food manufacturer.
  • The UK retailer is the consignee and in control of the import, so they are the businesses who will need to register for the tax where they pass the 10-tonne registration threshold.
  • If businesses import finished plastic packaging components using incoterms, they will need to agree with the other business about who is responsible for including the details on their Plastic Packaging Tax return and paying the tax. 
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