Plastic Packaging Tax (PPT): A summary

As announced in the 2018 Budget, the UK government is implementing a tax on plastic packaging on 1 April 2022. This is part of a targeted plan to move away from waste that is bound for landfill or incineration.

Who will it affect?

This tax will be charged to UK producers and manufacturers and importers of plastic. Inevitably it is envisaged that PPT will also have cost implications for customers and end-users within relevant supply chains.

What goods will be liable?

PPT will be charged on imports and production of *finished plastic packaging that is:

  • Predominantly plastic by weight
  • Does not contain at least 30% recycled plastic  

The packaging element of the goods has been defined as involving one of the following elements for goods at any point in the supply chain:

  • Containment
  • Protection
  • Handling
  • Delivery
  • Presentation

*A packaging component is ‘finished’ when the component has undergone its last substantial modification; or the last substantial modification prior to the packing/filling process of the packaging.

How much is the charge?

The tax charge is £200 per metric tonne of plastic packaging (imported or produced) and is applied when the packaging has undergone its last substantial modification. However, if plastic packaging is exported within a 12-month period, then the liability is cancelled.

When is registration required?

Businesses need to register for the tax even if packaging used contains over 30% recycled plastic or if the PPT liability is expected to be nil. If necessary, registration is required by 30 April 2022.

Groups can elect to appoint a representative member to register and pay the tax charge for entire group.

Are there any exemptions?

Importers and manufacturers that deal with less than 10 tonnes of plastic packaging over a 12-month period are exempt and do not need to register. It should be noted that HMRC will require accurate records to be kept proving exemptions.

The following products are exempt from PPT as they are not defined as packaging components:

  • Products for which the packaging function is secondary
  • Where the packaging is an integral part of the product
  • Products that are designed for displaying products and will be re-used in this way

Further exemptions do apply and are published online as part of HMRC PPT guidance.

Get in touch

If you have any queries on PPT, feel free to get in touch with your usual Indirect Tax team contact, or the below: 

Get in touch