20,000 UK businesses eligible for Plastic Packaging Tax – are you one of them?

Manufacturers or importers of 10 or more tonnes of plastic packaging, containing less than 30% recycled material, over a 12-month period should be registered for the tax, with the liability date fast approaching on the 1st May 2023.

The Plastic Packaging Tax (PPT) came into force in the UK on 1st April 2022 and applies at a rate of £200/tonne on plastic packaging with less than 30% recycled plastic, manufactured or imported into the UK, including packaging on goods which are imported.

It is estimated that 20,000 businesses across a broad range of sectors will be affected and those that fall within the regime will need to submit quarterly returns to HMRC detailing weights of plastic packaging components imported, and that which contain 30% or more recycled content, or is exempted because it is used for medicinal products, or for other reasons.

Imports of packaging which already contains goods, such as plastic bottles filled with drinks or plastic packaging around goods, are also potentially subject to the tax with some exclusions. 

Exclusions apply to filled packaging components with a primary storage function, such as glasses cases or DVD cases; and where the packaging is an integral part of the goods.

PPT is not charged on plastic packaging which is designed to be reused for the presentation of goods such as shop fittings or sales stands.

Businesses will need to conduct regular checks to ensure plastic packaging does not fall below the 30% threshold or else face fines. This means keeping a record of all checks conducted as well as completing plastic packaging tax returns over the accounting periods if the business is liable to pay the tax.

We have found many importers and manufacturers are not aware of this new tax, even though it has already been introduced. Are you compliant and have you taken action to avoid potential penalties?

Registration is required if:

At any time after 1st April 2022 a business expects to import or manufacture at least 10 tonnes of plastic packaging in the following 30 days. In that case registration is required within 30 days of the first day that this condition is met; or

A business has manufactured or imported at least 10 tonnes of plastic packaging in a 12-month period ending on the last day of a calendar month. In that case the business becomes liable for PPT from the first day of the next month and must register by the first day of the subsequent month.

In the first year of the tax, a business only needs to register for the tax when the amount of plastic packaging exceeds 10 tonnes in a 12-month period from 1st April 2022.

If either of these conditions is satisfied, registration is required even if a business’ packaging is not chargeable and it does not have to pay any tax.

RESOURCES

Check if you are liable and need to register for Plastic Packaging Tax
Register for Plastic Packaging Tax

To discuss your PPT situation, exemptions and compliance, EMAIL Andy Fitchett, our brokerage manager, who can take you through the implications.  We have, within our extended group, expertise and specialist business analysts that can help and advise you on this evolving situation and we can introduce you directly to the best solution for your business needs.