In April 2022, HMRC introduced the Plastic Packaging Tax (PPT). This environmental tax is aimed at businesses (in the UK or involved in the supply chain) that import or manufacture over 10 tonnes of plastic packaging containing less than 30% recycled content. On 1 April 2024, the PPT increased to £217.85 per metric tonne of plastic used.
At Waste Mission, we regularly receive questions about which plastics are exempt from the tax or why biodegradable and compostable plastic are included in the tax. Sometimes, last-minute queries come from business owners who use plastic packaging containing more than 30% recycled content and suddenly realise that they, too, should have kept records of all plastic use.
If these scenarios sound familiar, our tax guide is here to help.
Our Plastic Packaging Tax Guide will explain the UK laws surrounding plastic packaging and provide expertise to help your business reduce the tax it pays by simplifying and recycling its plastic packaging waste.
What is the Plastic Packaging Tax?
The UK Government estimated in 2022 that ‘five million tonnes of plastic is used every year, nearly half of which is packaging.’ The awful reality is that plastic can last centuries in landfills and cause serious environmental problems, polluting rivers, oceans and soils. We need to work together to reduce the amount of plastic packaging produced.
The Plastic Packaging Tax was introduced in April 2022 to encourage an estimated 20,000 businesses in the UK that import or manufacture plastic to minimise plastic waste and encourage investment in recycling.
If your business manufactures or imports over 10 tonnes of plastic packaging products per year that contain less than 30% recycled plastic, you could qualify for the tax.
How Much Does the Plastic Packaging Tax Cost?
New plastic packaging tax rates apply from April 2024. In line with the Consumer Price Index, the 3.3% increase will see businesses pay £217.85 per metric tonne of plastic used.
What Types of Packaging are Included in The Plastic Tax?
HMRC states that ‘plastic means a polymer material to which additives or substances may have been added.’
That means that cellulose acetate, plus biodegradable, compostable, and oxo-degradable plastics, are all included in the tax. However, cellulose-based materials, such as viscose, are not treated as plastic.
It’s also important to note that if the packaging is made from multiple materials but is predominately plastic by weight, it will be liable for the plastic tax.
There are two types of plastic packaging subject to tax:
- Packaging designed for single-use by consumers covers any single-use plastic product used by a consumer for containment, protection, handling, presentation, or delivery. Examples include ready-meal packets, disposable plates, or carrier bags. For more examples, visit this site.
- Plastic packaging designed for use in the supply chain can either contain the goods, protect the goods, handle the goods, present the goods, or deliver the goods. Examples include biscuit wrappers, pallet wraps, and clothes hangers. For more examples, visit this site.
Understanding which plastic packaging components are included in the tax can feel like a minefield. Thankfully, HMRC has created a tool to help check if the Plastic Packaging Tax applies to a component. HMRC guidance tool.
What Types of Packaging are Exempt From the Plastic Tax?
This section explores plastic packaging that is not included in the tax.
- Recycled plastic. Plastic packaging that contains a minimum of 30% recycled plastic is exempt from the plastic tax. However, even if you can prove you are using the correct percentage of recycled plastic, you still need to keep records of it. Here's a handy tool to work out the percentage of recycled plastic.
- Transport packaging. From plastic crates to reusable mail sacks, the Plastic Packaging Tax is not charged on transport packaging used in the delivery of goods into the UK.
- Plastic that is never going to be used for packaging. This includes highly specialised items such as plastic film to cover whiteboards.
- Plastic packaging for human medicinal products. While veterinary medicines are not exempt from the tax, any plastic packaging manufactured or imported for the immediate packaging of licensed human medicinal products is exempt.
There are exceptions within each of these sections, so, at Waste Mission, we always advise customers to take time to read through HMRC guidance.
Exploring The Two Types of Recycled Plastic
Recycled plastic comes from pre-consumer or post-consumer plastic waste that has been reprocessed through mechanical or chemical manufacturing.
Pre-consumer refers to plastic waste created through manufacturing processes and reused on the same site.
Post-consumer: This refers to plastic collected from household recycling and plastics collected from industrial sites that have been used in the distribution or supply chain.
Please note that plastic offcuts put straight back into the same manufacturing process are not considered recycled and cannot be used to describe products as made from recycled plastic. Recycled plastic must have either been remelted, compounded or repellitised at a reprocessing site to be legally labelled as ‘recycled’.
Packaging Made From Multiple Materials
Packaging made from multiple materials will be subject to the Plastic Packaging Tax if they contain more plastic by weight than any other material.
HMRC have a variety of examples showing how to work out whether multiple material packaging components are plastic.
Here is one example taken from HMRC’s site:
A 10-gram carton is made up of:
- 4 grams of plastic
- 3 grams of aluminium
- 3 grams of cardboard
All 10 grams will be considered a plastic packaging component, as plastic is the heaviest material.
However, suppose the weight of the plastic is less than or equal to that of the other materials. In that case, the component will not be considered a plastic packaging component, as plastic is not the heaviest material.
If you’ve read this far and your head is full of questions about ensuring due diligence within your business, read through our top tips.
Top tips for Manufacturers and Importers
- Research. Find out if your packaging components are taxable by the Plastic Packaging Tax. HMRC guidance tool
- Register. If your business manufactures or imports more than 10 tonnes of plastic packaging containing less than 30% recycled content over 12 months, you must register and pay the tax. Register for Plastic Packaging Tax.
- Record keeping. From a breakdown of the weight of plastic packaging components imported in each period to sufficient supporting evidence that recycled plastic was used, ensure you keep clear records. For further information, visit the HMRC guidance tool.
- Review. Use the packaging tax as an opportunity to reduce plastic waste and review the long-term sustainability of your packaging. Explore using more recycled plastic within components or consider switching to paper-based products or returnable packaging.
At the heart of the Plastic Packaging Tax is the focus on improving waste management—on moving towards a world where we create less plastic waste and invest more in recycling.
Let’s explore how you can turn your waste into savings and reduce your Plastic Packaging Tax.
Reimagine Waste and Avoid the Plastic Packaging Tax
As leading facilitators of the circular economy, at Waste Mission, we focus on helping companies move away from the wasteful practices of the traditional economy with its ‘take-make-waste’ model and instead keep products and materials in use at their highest value and for as long as possible.
With over 40 years of experience, we are experts in sustainable waste management and pride ourselves on making complex waste streams simple.
Sustainable waste management is all about:
- reducing the amount of waste generated in the first place
- reusing where possible
- recycling what can’t be reused
- selling what we can (‘one man’s waste is another man’s treasure)
- only then, disposing of what’s left
Bring us onboard, and our responsive team of experts will become an extension of your business, taking care of waste so you can stay focused on your core operations. We aim to educate, encourage, and simplify waste management by offering a bespoke, tailored service, all from a single point of contact.
We promise to:
- Guide you to reduce waste and increase your profitability
- Turn your waste into solutions, reducing reliance on new materials
- Navigate complex regulations for you, ensuring you meet environmental and legal requirements
- Provide a waste portal for contracted customers to easily access data on your waste production, recycling levels, and carbon footprint.
Together, we can create a future that’s a few shades greener and leave the Plastic Packaging Tax as a memory of the past.
Book a waste review today or call us on 01438 755307.
