Plastic Packaging Tax came into force on 1st April 2022 and is a tax that impacts businesses who expect to import or manufactured 10 tonnes or more of plastic packaging in the next 30 days, or have done so in the last 12 months.

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Below we've outlined some of the key points that businesses will need to consider to ensure that they accurately account for PPT and are compliant with their requirements.

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If you would like to find out more information, including information on when it applies and the registration process, click here.

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Packaging Considered as Plastic

Plastic is defied as "a polymer material to which additives or substances may have been added".

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If a component is made from multiple materials (such as plastic and cardboard), it will classify for the PPT if it contains more plastic by weight than any other substance.

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Packaging is subject to PPT if it is designed to be suitable for:

• Use in the supply chain

• Single use by the consumer

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Packaging which isn't Taxable 

Cellulose-based polymers that have not been chemically modified (such as viscose) will not be treated as plastic for the purposes of this tax.

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Plastic packaging which contains 30% or more recycled plastic will not fall under the PPT.  However, they will count towards a business's 10-tonne threshold and a business must keep records of it.  These records include keeping evidence that the plastic does indeed include 30% of more recycled plastic.

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Additionally, there are another four categories of packaging which are exempt from the tax.  They are products:

• Used for the immediate packaging of licensed human medicine

• Permanently recorded as set aside for non-packaging use

• Used as transport packaging to import multiple goods safely into the UK

• Used in aircraft, ship and rail goods stores

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As with recycled plastic, plastic packaging used for medicinal products and packaging which is permanently recorded as set aside for non-packaging use, must be included when working out the total weight of packaging manufactured or imported.

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On the other hand, Packaging used for transported imported goods and for stores on international aircraft, ship and rail journeys, does not need to be included when working out the total weight.

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Furthermore, there are an additional three types of products which are excluded from the tax and do not need to be included in the total weight calculations.  These are products that have been designed to be:

• Used in the long-term storage of goods

• An integral part of the goods

• Reused for the presentation of goods

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Finally, a business may be able to get tax relief if they manufacture or import packaging component which they:

• Export in the same accounting period

• Intend to export in the next 12 months

• Have paid tax on but later export or convert into different chargeable plastic packaging components

• Have evidence another business has exported or converted them. 

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When does a Business need to Register for PPT?

A business will have to register for PPT when: 

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• They expect to import into the UK or manufacture in the UK, 10 tonnes or more of finished plastic packaging components in the next 30 days 

• They have imported into the UK or manufactured in the UK 10 tonnes or more of finished plastic packaging components over the last 12 months (from the last day of the month and going no further back than 1 April 2022)   

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A business must register for PPT within 30 days of becoming liable for it (by meeting the 10-tonne threshold) and the tax is payable from the day the business is liable to register.   

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This includes non-resident taxpayers who import finished plastic packaging components into the UK on their behalf, or manufacture finished plastic packaging components in the UK.  

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The tax becomes chargeable when the goods are imported but, is accounted for quarterly in arrears. 

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Submitting and Paying a PPT Return

A business must submit a return to HMRC four times a year which each must cover an accounting period which are: 

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• 1st April to 30th June 

• 1st July to 30th September 

• 1st October to 31st December 

• 1st January to 31st March 

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The return must be submitted and PPT paid by no later than the last working day of the month following the end of the accounting period.  

Payment can be made in the following ways: 

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• Via Direct Debit 

• Approve a payment through the business’s online bank account.   

• Online or telephone banking, CHAPS or Bacs 

• Debit or corporate credit card 

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What Records should a Business Keep?

A business is responsible for keeping accounts and records that support the information they submit in their quarterly tax returns.   This includes information that shows how a business has worked out the figures they submit on their return and the evidence to support these figures.   

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All accounts and records must be kept for at least 6 years from the end of the accounting period.   

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Where relevant, a business’s accounts must include: 

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• A breakdown of the weight of plastic packaging components finished or imported in each period 

• The weight of plastic packaging exported in the period on which the tax was deferred 

• A breakdown of the weight of any plastic packaging for which a credit is claimed if the packaging has been 

• Exported, or 

• Converted into new packaging components 

• Any adjustments or corrections made to previous accounting periods 

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Where relevant, a business must keep evidence that: 

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• Supports the information they submit in their tax return 

• Supports any exemptions from the tax 

• Shows the recycled plastic content used in components is above the tax threshold (30% or higher)