A new tax on plastic packaging came in to force in the UK from 1 April 2022. It applies to all plastic packaging manufactured in, or imported into the UK that does not contain at least 30% recycled plastic.

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The rate of tax, which is payable on a quarterly basis, is currently £200 per tonne of any plastic packaging which falls within the above criteria.  In the Spring Budget on 15 March 2023, it was announced that this would increase to £210.82 per tonne from 1 April 2023.

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Manufacturers or importers of plastic packaging, including importers of packaging which already contains goods, need to ensure they comply with the tax.

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PPT is an environmental tax, the aim of which is to provide a financial incentive for businesses to use more recycled plastic in the manufacture of plastic packaging. The government envisages this will in turn lead to a greater demand for recycled plastic, which will then increase the levels of plastic waste recycling.

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Registration for PPT will be required if a business:

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• Expects to import into the UK or manufacture in the UK, 10 tonnes or more of finished plastic packaging components in the next 30 days or;

• Has imported into the UK or manufactured in the UK 10 tonnes or more of finished plastic packaging components since 1 April 2022 - this will change on 31 March 2023, when businesses will need to look back over the last 12 months on the last day of each month.

 

Penalties

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As announced in the Spring Budget on 15 March 2023, the penalty regime for PPT returns has now been aligned with that of VAT. This means that penalties start, based on the outstanding amount, on the 16th day that the payment is late, with a 2% penalty immediately due. This increases by a further 2% from day 30. In addition to this, from day 31, there is a further daily penalty equivalent to 4% p.a. of the outstanding balance. It is therefore important that returns are submitted and paid on time to avoid penalties.

 

Comment

The criteria for deciding, for example, what packaging falls within the tax, the plastic content of a certain type of packaging or if there are any exemptions applicable are extremely complicated and any errors can lead to incorrect or overpayment of the tax due. Take professional advice if you are affected.