Lyndon Firth
VAT Partner
The Plastic Packaging Tax (PPT) applies to all businesses that trade in the UK and either manufacture or import more than 10 tonnes of plastic packaging a year. Companies that meet these criteria must register and pay a tax of £210.82 per tonne.
Which businesses are affected the PPT?
The tax affects UK manufacturers of plastic packaging as well as businesses that export to the UK regardless of whether they have a presence in the UK. Multinational businesses that do not manufacture in the UK can still be caught by the requirement to register because they export items to the UK through HMRC depending on the product and immediate packaging.
Will your packaging be liable to PPT?
Plastic packaging manufacturers in the UK have been considering their requirement to register for the tax since 1 April 2022. This work is ongoing as businesses get to grips with the detailed registration requirements. Any manufacturers that have not yet registered, should act immediately. You will need to review and consider all available production data. This will reduce the risk of potential penalties for late registration.
We are also seeing multinational businesses registering for the tax based on either the product imported and/or its immediate packaging. This can be more complicated as it requires an in-depth consideration of the transport packaging exemption and determining who is liable for the delivery of the goods to the UK base.
PPT exemptions
Not all plastic is liable to PPT. Packaging classed as predominantly plastic will not be liable to PPT if at least 30% by weight of the packaging is comprised of recycled plastic. All forms of recycled plastic, except ‘scrap and regrind’ within a production facility, count towards the 30% test for recycled plastic content.
How we will help
If you are a UK manufacturer or a non-UK business operating in the UK, we will help you get to grips with PPT by analysing you’re your packaging data. We will then collaborate with you to establish a strategy for management of the tax. This will include training your teams and setting up robust documentation processes. We can also explore ways to mitigate the tax via R&D claims if you are considering development of new packaging solutions to reduce your use of virgin plastic or increase its recycled plastic content.
Read our short article on the PPT.