WellTax Blog

Plastic Packaging Tax: the measures businesses should take

July 5, 2022

From 1 April 2022, the UK Government introduced the Plastic Packaging Tax (PPT) and has advised all manufacturers or importers of plastic packaging to check whether they are subject to the tax. The relevant guidance can be found at: https://www.gov.uk/guidance/check-if-you-need-to-register-for-plastic-packaging-tax.

“No one will have to file a PPT declaration or pay the tax until July 2022,” HMRC points out, but it is advisable to register before this date.

The PPT will incentivise businesses to use recycled plastic in the production of plastic packaging. The production or import of 10 tonnes or more of plastic packaging containing less than 30% recycled plastic will be taxed at £200 per tonne.

Companies that exceed the registration threshold and already include recycled plastic in their packaging will still have to register but will not be required to pay any tax. Anyone importing plastic packaging will have to check who is responsible for documenting and paying the PPT. In this case it is unlikely to be the suppliers. For example, if a UK-based retailer imports goods from a European food manufacturer, the retailer is the recipient and therefore has control over the import, so it is the businesses that will have to register for the tax if they exceed the 10-tonne registration threshold.

If businesses import finished plastic packaging components using Incoterms, they will need to agree with the other business who should complete the PPT declaration and who is liable to pay the tax. HMRC’s guidance states that if you are unsure whether plastic packaging items fall within the scope of the PPT, you can contact HMRC at indirecttaxdesign.team@hmrc.gov.uk and provide information on the product’s end use and how it is used, including photos and links to websites where the product is purchased.

Domenico Santomasi

Photo by Brian Yurasits on Unsplash

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