Information on the rates of Plastic Packaging Tax

Information on the rates of Plastic Packaging Tax

The introduction of the Plastic Packaging Tax (PPT) came into effect on 1 April 2022.  This article provides an overview of the principles of how the tax works, and who it could impact in the UK.

What is the current and historic rates of Plastic Packaging Tax?

When PPT was introduced in April 2022, the rate applied was £200.00 per tonne of plastic packaging.

A new rate was announced in the recent Spring Budget, to be introduced on 1 April 2023, which is £210.82 per tonne of plastic. 

What is Plastic Packaging Tax?

PPT is the tax that is applied to plastic packaging that has been manufactured, or imported into the UK, containing less than 30% recycled plastic. So essentially, plastic packaging which contains more plastic by weight than any other single material, and does not contain at least 30% recycled plastic is taxed under the measure.

Who could be affected?

• UK businesses that manufacture plastic packaging
• UK businesses that import plastic packaging
• UK business customers of manufacturers of plastic packaging
• UK business customers of importers of plastic packaging
• Consumers who buy plastic packaging or goods in the UK

It should also be noted that businesses who import goods into the UK which are already wrapped in plastic packaging, may also be liable to pay for the tax. Examples of such goods include plastic-wrapped toys, food and drink, DVD/CD cases and printer cartridges.

From all the groups listed above, only those who reach or exceed the threshold of 10 tonnes per year will be liable to the new tax.

Those who manufacture or import less than 10 tonnes per year will be exempt.

Who won’t be affected?

• UK manufacturers and those importing plastic packaging into the UK:
  Which contains 30% or more recycled plastic
• Which is not predominantly plastic by weight, i.e does not contain more plastic by weight than any other material
• Who do not manufacture or import over the 10 tonne threshold per year

Why was the new tax introduced?

The Plastic Packaging Tax was introduced as a push to encourage UK businesses to increase their use of recycled plastic in the production of plastic packaging. Its aim is to encourage businesses to move away from single-use plastics and switch to less environmentally damaging packaging.

How is Plastic Packaging Tax applied?

From 1 April 2023, the new tax was applied at a rate of £210.82 per metric tonne for businesses in the UK that manufacture or import over 10 tonnes of plastic packaging over the period of 12 months.

Where the packaging is produced in the UK, it is the manufacturer who pays the tax.
Where the packaging or product contained within the packaging is imported to the UK, it is
the person who is importing who pays the tax.

Is your business impacted by the Plastic Packaging tax?

• If your business is or has been affected by the new tax, consider looking into the possibility of adopting new packaging solutions – it may now be more cost effective to move towards a greener alternative
• If you work with suppliers who package your goods for you, now is the time to discuss the financial effects that the new tax could cause – is it possible for your suppliers to switch to compliant plastics
• Understanding the new records that you will need to keep if you are going to be registering for the new tax is crucial and this is something you should be looking into now, in order to be fully prepared

Contact either Jessica Mason or Pippa Holdright – our dedicated specialists from our Indirect
Tax department – and they can discuss whether you will need to register for the tax, what
records you need to keep and the steps that you can take to either prepare for the tax, or the
processes you can implement to move towards being compliant.

Email: [email protected]
Phone: 01926 422292 or 02476 306029