Plastic Packaging Tax to be introduced April 2022 – Initial guidance

Rob Geary
Plastic packaging

The UK Government is introducing a Plastic Packaging Tax (PPT). This is intended to deter the use of single use plastic and move towards recycled plastic. The tax will apply to packaging that does not contain at least 30% recycled plastic.

Plastic packaging

PPT comes into effect on the 1st of April 2022.  Those affected must register for PPT if they have manufactured or imported 10 tonnes or more of finished plastic packaging components within the last 12 months, or will exceed that threshold in the next 30 days. A full list of packaging materials that are affected by PPT can be found on the GOV.UK website.

There are 2 tests to check who needs to register. First, you must look back over the last 12 months and secondly look forward to the next 30 days. The 12-month ‘look back’ test only applies to plastic packaging products that were produced or imported after 1 April 2022 – items prior to this are not included in the turnover calculation. However, every organisation that manufactures or imports PPT products will have to start keeping records of these from 1 April 2022.  HMRC have also confirmed that PPT returns will be an additional service that can be accessed through rather than requiring specialist software.  Returns will be due per calendar quarter. Returns and payments must be made within 30 days of the quarter end. When registering for PPT organisations should supply HMRC with an estimate of the expected tonnage of finished plastic packaging components they expect to produce or import over the following 12 months.

Where packaging components are imported using incoterms, it is important to know who is responsible for accounting for PPT. The tax becomes chargeable when the goods are imported, but is accounted for quarterly in arrears rather than at the time of import.

Manufacturers and importers of plastic packaging products will have to pay plastic packaging tax at the rate of £200 per tonne on the listed plastic packaging components that fall within the scope of PPT.

PPT is relatively new and at this stage we only have HMRC’s initial guidance.  However the following points are likely to be expanded upon in the coming months.

Six categories (so far) have been deemed exempt from PPT, other than plastic which is exempt because it contains at least 30% recycled plastic.  They are:

  1. Used for the packaging of licensed human medicine
  2. Permanently recorded as set aside for a non-packaging use
  3. Used as transport packaging to import multiple goods safety into the UK
  4. Used in aircraft, ship and rail good stores
  5. Comprised of components that are permanently designated or set aside for use other than a packaging use
  6. Exported from the UK

Businesses must still register for PPT for points 1 and 2 above, even though there is no tax to pay.

It may also be possible to claim PPT credit on any PPT that is used for subsequent export by yourself or someone else.

  1. If applicable, the claim can be taken off of the PPT return subject to time limits
  2. If the claim exceeds the PPT due, HMRC must repay the excess to the liable person
  3. Must keep business records and all associated evidence to support any claim

The following records of measurement must be kept in writing for 6 years

  1. Result of the weighing process
  2. The methodology used to carry out the measurement
  3. Weight of exempted plastic packaging and the reason for the exemption
  4. If the result of the process is expressed in a unit of measurement other than metric units, the calculations showing the conversion of that result into metric units

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