Preparing for the Plastic Packaging Tax

The Plastic Packaging Tax (PPT) is a new environmental tax designed to encourage the use of recycled plastic. From 1 April 2022, a tax of £200 per tonne will apply to plastic packaging manufactured in, or imported into, the UK that does not contain at least 30% recycled plastic.

While aimed primarily at manufacturers and importers, the tax will have ripple effects throughout the supply chain, affecting costs and compliance for many businesses.

Who needs to register?

You must register for the PPT if you manufacture or import 10 or more tonnes of plastic packaging within a 12-month period. This includes packaging that already contains goods (such as plastic bottles imported full of drinks). Even if your packaging meets the 30% recycled content threshold, you still need to register and file returns if you exceed the 10-tonne threshold; you simply won't have to pay the tax on the exempt packaging.

What counts as plastic packaging?

The definition is broad. It includes packaging designed for use in the supply chain (like pallet wrap and bubble wrap) and single-use consumer packaging (like plastic bags, disposable cups, and food trays). If a packaging component is made of multiple materials but contains more plastic by weight than any other single substance, it is classed as a plastic packaging component for the purposes of the tax.

Supply chain considerations

Even if you do not manufacture or import the packaging yourself, the cost of the tax is likely to be passed down the supply chain. Businesses should engage with their suppliers now to understand whether their packaging is subject to the tax and how this will affect pricing. Invoices for plastic packaging must include a statement that the PPT has been paid, providing visibility to business customers.