Many businesses are having to consider the implications of the new Plastic Packaging Tax (PPT) which took effect on 1st April 2022.
We have put together an overview of PPT and how it will affect your business.
What is Plastic Packaging Tax (PPT)?
PPT was introduced with the aim of increasing the recycled content of plastic packaging used for products in the UK economy.
Essentially, the tax is applied to any plastic item which is not made of 30% or more recycled plastic. Under the tax, HMRC will charge £200 per tonne.
It includes plastic packaging manufactured in the UK, as well as imported plastic packaging and imported filled plastic packaging.
Implications
There are wide-reaching implications, given the prevalence of plastic packaging across a broad range of industries. This affects all businesses using plastic packaging components for the containment, protection, storage, handling or presentation of goods, including:
- Manufacturers
- Importers
- Publishers
- Retailers
- Food and drink companies
When you reach the 10,000 tonne threshold, you are required to register with HMRC within 30 days and may need to pay a penalty if you don’t. Once you have registered, you are required to submit quarterly returns.
Types of packaging
In addition to plastic packaging that is manufactured in the UK or imported in its own right, the tax also applies to the plastic packaging surrounding imported goods. For instance, if you are importing clothing, food or parts, it would include:
- Plastic boxes
- Poly bags
- Bubble wrap
- Palette wrap
As well as other plastic packaging components:
- Labels
- Hangers
- Tags
- Bottles
- Cups
- Foam
All businesses should keep a record of the plastic packaging manufactured, imported into the UK, or imported as a filled product.
Supply chain
Businesses who are involved in the supply chain, but don’t import or manufacture plastic packaging themselves (e.g. where plastic packaging is bought from a UK supplier), will still need to consider the implications of PPT, as there is a joint and several liability clause in the legislation, which can be applied when PPT goes unpaid in the supply chain.
Businesses who switch to responsibly sourced, sustainable packaging, with 30% or more of recycled plastics, are exempt from PPT.
Support
PPT is an area that is difficult for professionals to assist with, as the quantifying of the different types of plastic packaging is something that can invariably only be done by businesses themselves. However, please let us know if we can act as a sounding-board, to act as a sense check for the preparations you have made.
For more details about the rules, please visit HMRC’s website.
