Preparing for Plastic Packaging Tax

UK government announced a brand new Plastic Packaging Tax last October (PPT), which kicks into action in less than two weeks on 1 April 2022. The aim of this tax is to stimulate increased levels of recycling and collection of plastic waste, diverting it away from landfill or incineration.

From 1 April if you manufacture or import plastic packaging you must check if you are liable for PPT. You will have 30 days to register for the tax from the date you become liable. Nobody will need to file a PPT return or pay the tax until July 2022 at the earliest, although you may need to register before that point.

Who will pay this tax?

If you’re in the business of manufacturing or importing 10 or more tonnes of plastic packaging containing less than 30% recycled plastic over a 12-month period you’ll need to register for this tax. This includes importers of packaging containing plastic goods, such as plastic bottles filled with drinks. Where the packaging you import already contains other goods, the tax only applies to the plastic packaging itself.

For those who fit this bill you will be taxed at £200 a tonne. Businesses over the threshold who already include recycled plastic in their packaging will still need to register but will not pay any tax. The kinds of businesses affected include packaging manufacturing, industrial manufacturing, consumer goods, online retail, pharmaceutical, chemical/oil, food and drinks and cosmetics.

How can businesses prepare?

The online service to register and pay will be available on 1 April 2022 when the tax takes effect. The tax will affect a wide range of businesses due to its broad scope. Importantly, registration for PPT will be required even if your business meets the 30% recycled content threshold and doesn’t need to pay any tax.

Businesses who import plastic packaging need to check who is responsible for complying with and paying PPT. This is unlikely to be suppliers. PPT will create a need for new systems and data collation for compliance, pricing, contracts, and supply chains and would be wise to plan now for their new normal for dealing and complying with the tax. Elements to consider include:

  • likely impact, supply chains (who is responsible, amendments to contracts/pricing)
  • data and reporting capabilities regarding PPT compliance
  • systems/actions for meeting PPT compliance
  • changes to systems to enable data collection, reporting, invoicing

Let’s Talk

Check out the page to see if you are liable and for further help, contact our team of tax specialists on Let’s Talk.

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