Plastic Packaging Tax changes in 2026

Introduction

What does the year ahead hold for companies in scope for the Plastic Packaging Tax? With rate increases, certification changes and fundamental reforms on the horizon, 2026 marks an important year for anyone managing plastic packaging compliance. Whether you're a seasoned PPT veteran or still getting to grips with the basics, understanding what's coming could save you significant compliance headaches.

What is the Plastic Packaging Tax?

Introduced in April 2022, the Plastic Packaging Tax (PPT) was designed to encourage greater use of recycled plastic in packaging and stimulate demand for this material. The tax applies to plastic packaging and single use plastics manufactured in, or imported into, the UK.

The fundamental principle is straightforward: if your Manufactured or imported plastic packaging components contains less than 30% recycled content, you pay the tax. If it contains 30% or more recycled plastic, it's exempt but you may still need to report.

Who needs to register for PPT?

You must register for PPT if you manufacture or import 10 tonnes or more of finished plastic packaging components within any 12-month period. This threshold applies whether you're:

• Manufacturing plastic packaging in the UK
• Importing finished plastic packaging from overseas
• Performing substantial modifications to existing packaging

It's crucial to understand the 12-month lookback rule. You calculate the 12-month period from the last day of each month, not from a fixed date like 1 April. This means you need continuous monitoring of your packaging volumes to identify when you cross the threshold.

You should also consider using the Look forward test, whereby if you expect to import or manufacture 10 tonnes or more of finished plastic components you must also register for Plastic Packaging tax reporting.

What counts as plastic packaging?

The tax applies to all finished plastic packaging components, not just primary packaging. This includes secondary packaging and any other single use plastic packaging in your supply chain. Even biodegradable plastics are subject to PPT if they contain less than 30% recycled content.

One common misconception: even if your packaging is exempt because it contains 30% or more recycled content, it still counts towards your 10-tonne registration threshold. You need to maintain detailed records for all plastic packaging, exempt or not, and may still need to report

The 2026 landscape: What's changing?

Rate increase from April 2026

From 1 April 2026, the PPT rate increases to £228.82 per tonne, up from the current £223.69. While this £5.13 increase might seem modest, it's tied to CPI inflation and represents another upward pressure on operating costs for businesses already managing tight margins.

For context, the tax started at £200 per tonne in 2022-23. The steady increases reflect the government's commitment to making virgin plastic less economically attractive, though many industry voices argue the rates remain too low to genuinely shift behaviour given that virgin plastic continues to be cheaper than recycled alternatives.

Mandatory certification on the horizon

Perhaps the most significant development for 2026 is the government's planned consultation on mandatory certification for recycled content claims. Expected in early 2026, this consultation will define new requirements for businesses claiming the 30% recycled content.

What was the driver for this? It’s felt that intervention will be needed to address concerns about fraudulent claims and unreliable data, particularly for imported packaging where verification can be challenging. While mandatory certification aims to create a more robust and trustworthy system, it will inevitably add compliance costs and administrative burden.

For businesses currently relying on supplier declarations or basic documentation, this represents a fundamental shift. You'll need to prepare for more rigorous evidence requirements and potentially engage with third-party certification bodies.

Looking ahead to April 2027

While 2027 might seem distant, two major reforms taking effect then will influence your strategy throughout 2026:

The Mass Balance Approach (MBA): From April 2027, chemically recycled plastics[2] will be able to count towards the 30% recycled content threshold using an MBA methodology. This is significant because it opens up new sources of recycled content, particularly for applications where mechanically recycled plastic isn't suitable. Technical consultations defining the requirements are expected throughout 2026, so businesses should monitor these developments closely.

Exclusion of pre-consumer waste: This is the big one. From April 2027, pre-consumer waste (manufacturing offcuts and post-industrial waste) will no longer qualify as recycled content for PPT purposes. The focus shifts entirely to post-consumer waste.

If your current compliance strategy relies on pre-consumer waste to meet the 30% threshold, you need to act now. The clock is ticking to find alternative sources of post-consumer recycled content or prepare for increased tax liability.

 Quarterly reporting requirements

PPT operates on fixed quarterly periods ending 30 June, 30 September, 31 December and 31 March. Your return is due by the last working day of the following month. Miss these deadlines and you risk penalties from HMRC.

Each return requires detailed breakdowns of:

• Weights of finished plastic packaging components manufactured or imported
• Packaging exported or intended for export (where tax is deferred)
• Exempt packaging with 30% or more recycled content
• Any credits claimed for previously taxed packaging

The documentation burden

HMRC requires you to maintain records for at least six years. This isn't just about keeping invoices. You need comprehensive documentation showing:

• Weight records in tonnes, kilograms and grams for all plastic packaging components
• Product line tracking (components produced to the same specification)
• Evidence supporting exemption claims, particularly recycled content percentages
• Due diligence on recycled content claims and supply chain audits
• Export documentation for any deferred tax

For the 30% recycled content exemption, you must maintain records showing percentage calculations, supporting evidence of recycled plastic use, dates, product specifications and source confirmation. This is where many businesses struggle, particularly when dealing with complex supply chains or imported packaging.

The importer's dilemma

UK manufacturers have greater control over their documentation and processes. Importers face a tougher challenge: obtaining reliable recycled content certificates from overseas suppliers who may not fully understand UK requirements or may be operating in jurisdictions with different standards.

This is where due diligence becomes critical. You can't simply accept supplier declarations at face value. You need robust verification processes, and with mandatory certification coming, these requirements will only intensify.

PPT: The economic reality

Today, virgin plastic remains cheaper than recycled alternatives in many applications. This economic reality undermines the tax's fundamental objective of driving recycled content use.

The UK's plastic recycling infrastructure faces persistent challenges. Several plastic recycling plants have closed in recent years due to high operating costs and competition from cheaper virgin plastic and imports. This creates supply constraints for post-consumer recycled material, making it harder and more expensive to source the volumes needed to meet the 30% threshold.

For food-contact applications, the challenge is even more acute. High-grade recycled plastic meeting food safety standards is scarce and expensive. Many food manufacturers find themselves paying the plastic tax because suitable recycled alternatives simply aren't available at scale.

These infrastructure and supply challenges mean that even businesses committed to using recycled content may struggle to achieve it consistently. The result? Higher costs that ultimately flow through to consumers.

Managing multiple regulations

PPT doesn't exist in isolation. In 2026, you're also navigating:

Extended Producer Responsibility (EPR): With eco-modulated fees linking costs to packaging recyclability (which is NOT the same as recycled content!), EPR creates additional compliance complexity and cost implications.

Deposit Return Scheme (DRS): While implementation timelines continue to evolve, businesses need to prepare for this additional layer of packaging regulation.

Managing these overlapping requirements demands sophisticated data collection systems, robust processes and often, specialist expertise.

How ERP UK can help

With over 700 businesses relying on our expertise across WEEE, batteries and packaging compliance, ERP UK brings deep knowledge of the PPT landscape and the practical challenges businesses face.

Our three-step compliance process:

1. Analysis and planning:We analyse your product data and create a comprehensive collection plan tailored to your business model and supply chain.
2. Data verification:We contact your suppliers to gather accurate packaging data and verify quality before submissions, ensuring your declarations stand up to HMRC scrutiny.
3. Calculation and reports:We calculate your liability accurately and create quarterly reports that meet HMRC requirements, maintaining the methodology reports and evidence needed for potential audits. (We are not a tax agent, so the actual reporting is done by you.)

Why work with specialists for Plastic Packaging Tax compliance?

PPT compliance does involve filling in forms. But it's also about:

• Understanding complex exemptions and when they apply to your specific circumstances
• Maintaining audit-ready records across multiple jurisdictions
• Navigating supplier relationships to obtain reliable data
• Staying ahead of regulatory changes like the upcoming certification requirements
• Integrating PPT compliance with your broader environmental obligations

Our team stays current with every regulatory development, consultation and technical change. We translate complex requirements into practical action, giving you confidence that your compliance is robust whilst freeing your team to focus on core business activities.

As a long-term strategic partner, we handle your quarterly returns. We also help you prepare for upcoming changes, identify opportunities to reduce tax liability through legitimate means, and build compliance processes that scale with your business.

Preparing for what's ahead

Immediate actions for 2026:

• Audit your current position: Review your packaging portfolio and current recycled content levels. If you're relying on pre-consumer waste, you need alternative strategies before April 2027.
• Strengthen supplier relationships: Engage with your packaging suppliers about recycled content certification and prepare for mandatory certification requirements.
• Review your data systems: Ensure you can track packaging weights, recycled content percentages and exemptions accurately across your entire supply chain.
• Monitor consultations: Stay informed about the technical consultations on MBA and certification requirements expected throughout 2026.
• Consider professional support: The compliance landscape is becoming more complex, not simpler. Expert guidance can prevent costly errors and identify opportunities you might miss.

Strategic considerations for PPT:

Think beyond compliance. The businesses that thrive in this environment are those that view PPT not as a burden but as a driver for innovation. Can you redesign packaging to reduce plastic use? Can you work with suppliers to increase recycled content? Can you communicate your environmental commitments to customers in ways that build loyalty and differentiation?

The regulatory direction is clear: expectations around recycled content will only increase. Early movers who invest in sustainable packaging solutions now will be better positioned for future requirements and changing consumer expectations.

The Plastic Packaging Tax in 2026 presents challenges, of course. But with the right approach, robust processes and expert support, you can navigate these requirements confidently while advancing your broader sustainability objectives.

Need expert guidance on your PPT compliance?

ERP UK's specialist team can help you navigate the complexities, ensure accurate reporting and prepare for upcoming changes. Visit erp-recycling.org/uk to learn more about our Plastic Packaging Tax services, or contact our team to discuss your specific requirements.

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