Plastic Packaging Tax (PPT)
On April 1 2022, the UK government introduced a new plastic packaging tax (PPT), this article aims to inform you on what exactly it is, and what it means for your business.
What is the tax?
The aim of this tax is to incentivise the use of recycled material in the production of plastic packaging. It will affect a very wide range of businesses due to its broad scope. It will affect a multitude of sectors, ranging from consumer goods to cosmetics, pharmaceutical to food and drink, cosmetics to industrial manufacturing and beyond.
This tax will apply at a rate of £200 per tonne on plastic packaging with less than 30% recycled plastic. It will apply to goods manufactured in the UK, as well as packaging on goods which are imported into the UK. This means that if goods don’t meet a minimum of 30% recycled plastic, they will be taxed. If a business exceeds a threshold of 10 tonnes of plastic packaging per annum, further charges will apply.
What do I need to do?
Any business that imports plastic packaging, products contained in plastic packaging, or that manufactures plastic packaging in the UK, will be liable to register for PPT.
Registration is required even if a business does meet the 30% recycled content threshold and in theory does not need to pay any tax.
Businesses can register for Plastic Packaging Tax via the government gateway here, where they can also find a full list of the details required to do so.
How to pay
This tax is paid via the plastic packaging tax return paid to HMRC every quarter. The accounting periods are:
- 1 April to 30 June
- 1 July to 30 September
- 1 October to 31 December
- 1 January to 31 March
For a more in-depth view of what to include on your plastic packaging tax return, visit the government webpage here.
Keep relevant records
In order to support the information that you submit on your Plastic Packaging Tax return, there are a number of accounts that you must keep in order to prove compliance. A list of the accounts you must keep can be found on this government webpage.
You will also be required to prove that imported or manufactured plastic packaging contains at least 30% recycled plastic, if you intend to avoid the tax. A non-exhaustive list of documents that might be used to prove this is as follows:
- Product Specification – which shows proportion of recycled packaging, weight (in tonnes, kilograms, & grams), if packaging is plastic, or if it’s exempt from tax
- Contracts – which show the quantity, proportion, and weight of plastic packaging, if packaging is plastic, or if it’s exempt from tax
- Production certificates and certificates of conformity – used to show the proportion of recycled plastic in plastic packaging
- Business accounting systems – used to show the plastic recycled through the manufacturing process
- Accreditations and international standards – Accredited bodies such as the International Organization for Standardization or the British Retail Consortium, conform to a number of standards. HMRC recognises accreditation from organizations such as these.
- Quality assurance audits – this can be an internal or external audit that shows the level of recycled plastic, the weight of the plastic packaging, if packaging is plastic, or if it is exempt from tax.
For in-depth and exhaustive instructions on the records and accounts you must keep for PPT, please refer again to the government webpage linked above.
On Monday April 25 at 15:45-16:45, there will be an introductory HMRC webinar on the Plastic Packaging Tax. You can sign up to attend it here.
For more information and support on international trade, please contact the Global Service Desk at [email protected]
Essential knowledge and guidance on all things ‘International Trade’ can be found on the Trade Toolkit section of our website.