Plastic Packaging Tax – do you need to register?

Plastic Packaging Tax (PPT) was introduced in the UK on 1 April 2022.

This is an environmental tax with the aim to reduce the amount of virgin plastic being used in the supply chain although cynics will say that it’s just another revenue tool. Arguably the cost of compliance may actually be higher than the tax payable for many but either way, it’s been introduced and businesses need to ensure that they have confirmed whether it applies to them.

Anecdotally HMRC were expecting revenue of over £200m in the first year with potentially 20,000 businesses registering for PPT on 1 April whereas in reality it is apparently just below 1000 so far. This may be because the threshold has not been reached yet but there is growing concern that businesses have just failed to recognise the impact of PPT on them and not done anything.

Some key points:

• PPT is payable on plastic which is manufactured in or imported into the UK.
• Registration is required when the threshold of 10 tonnes per annum is breached.
• There is relief for goods which are more than 30% recycled and some exemptions so there may be no tax to pay but a business is still required to register and declare these plastic goods, where the threshold is breached.
• In addition, businesses are required to carry out due diligence in the supply chain to ensure that PPT has been paid on plastic products they buy. In certain circumstances non-compliant businesses may be jointly and severally liable for the tax.
• There are penalties for non-compliance.

Action required

If your business manufactures or imports significant amounts of plastic which is used as packaging either in the supply chain or as a one-off use by the consumer then you need to consider whether you are liable to register for PPT.

Even if you are not liable to register, you will need to be able to demonstrate this to HMRC if they come knocking.

Our article published earlier this year sets out further details but if you need assistance or more information we would be happy to discuss it with you.

For more information about the topic explored in this article, contact Colin Laidlaw here.