2023 – Navigating the Plastic Packaging Tax

On 1 April 2022, the Plastic Packaging Tax (PPT) was implemented in the UK, imposing a levy of £200 per tonne on newly manufactured plastic packaging. As of 1 April 2023, this tax rate increased to £210.82 per tonne. This piece explores what has changed since the PPT’s introduction and how businesses can navigate this shifting landscape.

Understanding the Impact of Plastic Waste Annual statistics reveal that the UK is responsible for over two million tonnes of plastic packaging waste, translating to approximately 36kg per capita, roughly equivalent to the weight of an 11-year-old child. Astonishingly, despite recyclability of most of this waste, merely 45% ends up being recycled. The remainder either ends up in landfills or contributes to the eight million tonnes of plastic littering our oceans.

Introducing the Plastic Packaging Tax

The PPT was established as the first stride towards making companies more accountable for their packaging footprint, thereby moving the UK closer to a greener approach to packaging.

The subsequent step involves the introduction of the Extended Producer Responsibility (EPR) regulations, which will ensure producers bear the full cost of the collection, sorting, recycling, and disposal of household packaging waste, rather than passing these costs onto taxpayers.

Achieving Compliance

What Does Your Business Need to Do? To ensure your business complies with these regulations, consider the following steps:

1. Identify Your Packaging Subject to PPT: The PPT applies to any polymer material, even those that are biodegradable, compostable, or oxo-degradable. The only exceptions are packaging products with 30% or more recycled plastic content, which are exempt from the tax but still count towards the 10-tonne registration threshold.
2. Quantify the Weight of Your Manufactured or Imported Packaging: This measurement must be in metric values, per component. Five methods can be used: individual component, sample component, material inputs, verified specification, or bulk weighing.
3. Determine When to Register for the PPT: HM Revenue and Customs (HMRC) PPT registration threshold tests can be found here. To avoid penalties, ensure you register for PPT when required.
4. Maintain Proper Records: Records, which must be preserved for at least six years from the end of the accounting period, should include detailed information about the weight of plastic packaging components manufactured, imported, or exported, as well as any adjustments and evidence supporting exemptions or recycled content percentages.
5. Complete Returns and Payments: Quarterly returns must be submitted, and any tax due paid, no later than the last working day of the month following the end of the reported accounting period.

Understanding Extended Producer Responsibility

Set to take effect from January 2024, EPR regulations have a wider reach and will apply to businesses that satisfy all the following conditions:

• Operate as an individual business, subsidiary, or group (excluding charities)
• Generate an annual turnover of £1 million or more
• Handle over 25 tonnes of packaging within a calendar year
• Engage in any of the packaging activities listed by HMRC

Note, the threshold refers to the calendar year, and the 25-tonne limit of packaging is higher compared to the PPT threshold. EPR regulations encompass all types of packaging, thereby implying broader implications beyond merely plastic packaging.

EPR regulations affect businesses that supply packaged goods to the UK market, import products in packaging, operate an online marketplace, or hire or loan out reusable packaging. These businesses will need to collect and submit data on their packaging handling and supply, and pay a waste management fee calculated based on prior year data.

Plastic Tax Help

If you’re unsure whether these regulations apply to you, the Environment Agency provides useful resources, including an online service to determine your reporting obligations come 2024. Act now to ensure your business is future-ready for the green transition in the UK’s packaging industry. Do you want an answer faster, then call ESG PRO on 0331 630 0728 or just send us a message.

Humperdinck Jackman

Leads the daily operations at ESG PRO, he specialises in matters of corporate governance. Humperdinck hails from Bermuda, has twice sailed the Atlantic solo, and recently devoted a few years to fighting poachers in Kenya. Writing about business matters, he’s a published author, and his articles have been published in The Times, The Telegraph and various business journals.

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