Plastic Packaging Tax Summary

ERP UK has produced this briefing for companies wanting to understand the new tax.

Why is this important for your business?

  • This is a new tax applicable in the UK;
  • There are penalties for liable businesses who do not register
  • Costs for some businesses may be significant

What is the Plastic Packaging Tax?

A new £200 per tonne tax on plastic packaging in the UK – from April 2022.

What is the aim of the Plastic Packaging Tax?

To increase the use of recycled material in the production of plastic packaging. The tax will encourage businesses to work with suppliers of products whose packaging includes recycled material. Demand for recycled material is expected to increase the collection and recycling of waste plastic – reducing the amount which is landfilled or incinerated.

Overview

Scope

The tax will apply to:

  • Plastic packaging manufactured in the UK
  • Plastic packaging imported into the UK

Definition

  1. The definition of plastic packaging under PPT results in a scope wide than that of the current Packaging Waste Regulations – for example, plastic bags and disposable plastic cups.
  2. Plastic includes bioplastics, including biodegradable, compostable and oxo degradable plastics.

There are 3 categories of products which will not be subject to the tax:

  1. Products designed to be suitable to contain goods at the time of sale to the consumer or user.
  2. Products designed where the packaging is an integral part of the goods and are necessary to enable the goods to be used by the consumer or user.
  3. Products which are primarily designed to be re-used for the presentation of goods to a consumer or user and have been permanently set aside for this purpose, before or as soon as they have been manufactured or imported.

There are 4 exemptions which remove specific forms of plastic packaging from the scope of the tax:

  1. Plastic packaging manufactured or imported for use in the immediate packaging of a medicinal product
  2. Transport packaging used on imported goods
  3. Packaging used as aircraft, ship, and rail stores
  4. Components that are permanently designated or set aside for use other than a packaging use

As this is a new tax guidance the decisions on scope remain in development.

Myth busting:

Recyclability of packaging is NOT the same as recycled content. Regardless of whether you recycle packaging, or your packaging can be recycled, unless it has recycled content of 30% or more, the Plastic Packaging Tax will be charged.

Registration

Whilst there are many similarities, it is important to be aware that there are subtle differences between reporting to comply with the current Packaging Waste Regulations and with the Plastic Packaging Tax.

Legislation:

Plastic packaging tax legislation provides that tax which is not paid may implicate secondary businesses further down the supply chain who become jointly and severally liable for the tax.

Exports

  • Where plastic packaging is intended for export, payment of the tax can be deferred for
    up to 12 months.
  • Only if certain requirements are met and if the packaging is exported within that 12-month period the liability for that tax is cancelled.
  • However, if the direct export condition is not met, the tax on the packaging becomes due from that date it was not met.

Tax payment

  • Plastic Packaging Tax will be due on all in scope plastic packaging that is not exempt from the tax.
  • Reporting and payment of any tax due is required quarterly.

What are the risks of non-compliance?

Like VAT, Plastic Packaging Tax is regulated by Her Majesty’s Revenue and Customs (HMRC). Significant financial penalties will be imposed on companies for deliberate or unintentional non-compliance and/or providing inaccurate information.

What to do next

A non-exhaustive list of things to check and action to prepare your business for the Plastic Packaging Tax:

  • Whether your business’ activities are covered by the PPT
  • Where your business activities sit in the supply chain (others may pass PPT on to you)
  • Whether your plastic packaging is within the scope of the PPT
  • What records you have of:
    • The weight of plastic packaging you import (including around products) and the plastic packaging you manufacture
    • The recycled content of this plastic packaging
  • Estimate cost liability
  • Alert your finance team – for budget and possible changes to invoices (which may need to show PPT paid)
  • Plan your data gathering and record keeping to support PPT submissions
  • Consider whether you need external support

How ERP can help your business?

ERP’s data services team will:

  • Contact suppliers on your behalf and gather the required information quickly and efficiently
  • Identify: in scope, out of scope, and exempt packaging
  • Identify: what packaging has a recycled content of 30% or greater
  • Confirm if you are under, meet or exceed the 10-tonne tax threshold
    • For those currently under the threshold a tracking services is provided
  • Determine your Plastic Packaging Tax liability
  • Provide a bespoke report to accurately complete HMRC tax declarations
  • Upon request of HMRC produce supporting evidence for all exemptions and recycled content declarations
  • Identify suppliers which contribute the most to your liabilities for future targeted packaging improvements

Interested?

Please complete the Plastic Packaging Tax data service enquiry form.

Further information

UK Government webpages cover the Plastic Packaging Tax in simple and straightforward detail:

Related legislation changes

Plastic Packaging Tax is part of a group of policy proposals for collection and packaging reforms in the UK. See the links below:

Other ERP services

ERP provide WEEE, Battery and Packaging compliance in the UK – simple pricing and great customer service reduce the complexity of compliance for our members.

ERP is part of the Landbell Group – the leading global supplier of environmental and chemical compliance solutions.
Find out more at www.landbell-group.com/

*Download the printable Plastic Packaging Tax overview PDF document

Disclaimer

Please note that the information provided here is based on draft legislation and guidance. While the information provided is believed to be correct at the time of issue, neither ERP UK nor its advisors accept liability in any circumstances for its accuracy, adequacy or completeness, nor will any express or implied warranty be given.

Plastic Packaging Tax Enquiry Form

To find out how our data services can support your business with Plastic Packaging Tax, please complete our enquiry form

Your details

Which of the following is applicable?