Plastic Packaging Tax – What Businesses Need to Know

by | Feb 22, 2022 | Business Tax

The Plastic Packaging Tax (PPT) is due to be introduced from 1 April 2022 and numerous parties will be affected by the change, including plastic manufacturers, those in supply chains, sellers and even consumers. It is hoped that the introduction of this new tax will encourage the use of more recycled packaging, and the initiative forms a key part of the Government’s environmental and sustainability plans.


What is the Plastic Packaging Tax?

Plastic which has been manufactured in or imported to the UK will be subject to the new tax.

‘Plastic packaging’ for the purpose of the new tax, is defined as packaging which is predominantly comprised of plastic (measured by weight), and which contains less than 30% recycled plastic.

Exemptions will apply to manufacturers and importers of less than 10 tonnes of plastic packaging per year, which is likely to be welcome news for smaller businesses who may not meet this threshold.


Registering for the Plastic Packaging Tax

It is important to note that even for businesses meeting the 30% recycled content threshold, they must still register for the new tax if they handle plastic packaging.

To register for the plastic packaging tax, you will need to provide the following details on the HMRC website.

  • Business type
  • Businesses address and contact details
  • Date the business became liable for plastic packaging tax
  • Estimate of how much finished plastic packaging you expect to manufacture or import in the next 12 months
  • Customer reference number – this could be your Corporation Tax Unique Tax Reference (UTR), Self-Assessment UTR (or National Insurance number), Company Reference number, or Charity Registration number.

Following successful registration, you will need to keep records relating to your plastic packaging for a minimum of six years from the end of each accounting period. Exact details of the records to be retained, can be found on the plastic packaging website.

Finally, it’s worth noting that you should keep records even if you do not currently meet the threshold. This is because the threshold applies on a rolling 12-month basis, which could be reached at any point, resulting in tax owed and previous records required.


Preparing for the New Plastic Packaging Legislation

So, what can you do to prepare for the changes coming in April 2022? There are several ways in which you can prepare yourself and your business ahead of time to ensure you are ready for the new legislation and this includes:

  • Acquire a clear understanding of the details of the new PPT tax. Familiarise yourself with the details by reviewing HMRC’s Plastic Packaging Pages, which include guidance relating to which businesses are affected, the information that must be provided, the registration process and records to be retained.
    Note however that as a new area of taxation, all the information on PPT continues to be updated and you are advised to regularly review the latest developments via the Plastic Packaging Website.
  • Make the switch to recycled materials if you have not already. The Government hopes that this is the course of action most businesses will take where possible and is ultimately the intention of the new tax.
  • Consider your suppliers. Make sure that your suppliers know that you are aware of the PPT and wish to avoid it. In the event that you need to find new suppliers or forms of packaging, allow yourself time to make these changes in advance of the April deadline.

Plastic Packaging Tax Further Support and Guidance

As with all areas of business taxation, particularly new taxation, Kingston Burrowes has a wealth of experience supporting businesses. If you need further advice on the PPT, please get in touch.

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