Plastic packaging tax: one year anniversary

Plastic packaging tax (PPT) was introduced on 1 April 2022. A recent freedom of information request indicates that in its first six months the revenue arising was c£136m, a whopping 679k tonnes of plastic liable for the charge.

PPT was not introduced with a fanfare and HMRC data suggests that there are a number of businesses which have yet to bring their affairs up to date.  HMRC are understood to be progressing a programme of writing to those which they think could be affected using alternative government data.  Importantly, the requirements are such that a manufacturer or importer of packaging may need to register and meet certain compliance obligations even though they do not have any PPT due.  The expectation is that nearly a year in, a number of businesses are still unaware they may be within the scope of the rules.

Registration requirements

One misconception relates to the requirement of businesses to register.  If a liability arises, this is in respect of the manufacture or import of plastic packaging which contains up to 30 percent recycled plastic.  However, the registration limits relate to all plastic packaging.  Manufacturers and importers of plastic packaging components are liable to be registered for the PPT if:

  • There are reasonable grounds to believe that they will manufacture and/or import at least 10 tonnes of finished plastic packaging components in the next 30 days (look forward test); or
  • They have manufactured and/or imported at least 10 tonnes of plastic packaging components in the past 12 months (look back test).

Put simply, this means that a business which imports or manufactures at least 10 tonnes of plastic packaging which is made of recycled material will still need to register.  In addition, it will be required to carry out certain checks to ensure that they can demonstrate it is taking reasonable care when dealing with this tax.

Registration deadlines

There are several helpful videos on HMRC’s dedicated website area which provide guidance on the PPT registration deadlines.  Two tests apply which are like the registration tests for VAT – a look back test and a look forward test.

The look back test

This test is, like many plastics, rather complex.  For the first year, the test should review the position since 1 April 2022 (rather than 12 months which will apply from 1 April 2023).  A company will need to register within 30 days of meeting the 10 tonnes threshold.  It would therefore need to have reviewed the position on the first day of each month after 1 April 2022, i.e. on 1 May 2022, 1 June 2022 etc.

So, assume a business has produced more than 10 tonnes of plastic packaging between 1 April 2022 and 30 June 2022.  The business should have identified this on 1 July 2022 and would have needed to register by 30 July 2022 (30 days from 30 June 2022 if this was the day the business met or exceeded the limit).  The business will then account for any PPT from 1 July 2022 onwards.

The look forward test

This test is more straightforward.  Assume a business which received an order on 16 May 2022 for an order of 15 tonnes to be delivered that month.  The business should have registered by 14 June 2022 (30 days after receiving the order) and account for and pay PPT on all plastic packaging from 16 May 2022. This includes packaging relating to any other orders.

PPT charge

The PPT charge is £200 per tonne on ‘plastic packaging components’ containing less than 30 percent recycled plastic.  The HMRC portal does however, require a business to include information on all plastic packaging components that a business manufactures or imports into the UK.

Plastic packaging must be reviewed by its constituent components.  If plastic is the heaviest single element of a component, the component will be chargeable to PPT.  This is based on the total weight of the component which may, therefore, include elements which are not made from plastic.

PPT is charged when the component is finished and has had its last substantial modification before being packaged or filled up.  For an importer of goods, in most cases the business which is doing the import will therefore be required to register and become liable for PPT.

HMRC’s guidance notes and recorded webinars aim to clarify some of the uncertainties in these areas.  There are also exemptions and reliefs which can be applied in certain circumstances.  Given the tax is new, the expectation is that the guidance will be refined as more areas of uncertainty are identified.

Wrapping up

The purpose of the legislation was to bring about behavioural changes rather than to act as a revenue raiser.  Anecdotal evidence suggests that businesses are thinking about more sustainable alternatives. Quality Street recently changed to paper wrappers and the timing suggests this move may have in part been prompted by the PPT. To an extent it is meeting its objectives.

The 30 percent threshold suggests that plastic which is not liable could still include a large amount of non-recycled material.  It will be interesting to review whether the tax encourages more innovation in this area.

Other behavioural changes may arise from due diligence checks which businesses are required to carry out. Again, the HMRC website provides some solid guidance on why and how the checks should be applied.

Despite the available guidance, there is a lot of confusion around the way the rules work. That may explain the nudge letters which as indicated businesses are understood to have been receiving.

Larger businesses, such as companies in the senior accounting officer regime or those affected more generally by related governance requirements, should look at this area as a matter of urgency.  This is because there may be associate penalties in addition to those directly levied under the PPT.  Due diligence processes should of course be reviewed regularly to ensure that they are sufficiently robust.

One measure which has been softened is the proposal to include PPT information on invoices.  Whilst this is now encouraged by HMRC, it is not currently mandatory, although it will be interesting to whether this requirement will be recycled and reinstated in future.

For advice on your business’s plastic packaging tax liability, and consultancy on other ESG (environmental, social and governance) responsibilities of your business, please get in touch with your usual BKL contact or use our enquiry form.



Sam Inkersole

In 2022, Sam won the Taxation’s Rising Star award at the Taxation Awards in and was named in the Accountancy Age 35 Under 35.

Jon Wedge

While Jon’s client work focuses on the financial services sector, he also oversees the firm’s assurance service, as well as supporting the trainees following in his footsteps.


Elana joined us in 2017 as an ACA trainee, after graduating from Durham University where she had studied languages. She is now a manager in our assurance team.


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