The new tax on plastic packaging in the United Kingdom (UK) came into effect in April 2022.
This is the UK government’s bid to crack down on the use of single-use plastics.
This is a new tax to encourage greater reliance on recycled plastic.
The tax will apply to plastic packaging components.
It do not contain at least 30% recycled plastic. They are manufactured or imported into the UK (although some exemptions apply).
Which companies will be affected by PPT?
Plastic packaging is widely used in various fields, so PPT will have a wide-ranging impact.
Examples of businesses that may be affected include:
Retailers – Imported products such as trash bags, sandwich bags, water/carbonated drink bottles and tote bags
Manufacturer – manufactures or imports plastic parts
Publishers – Importing plastic used for laminating books or putting plastic sleeves over magazines
Shipping Suppliers – Importing Plastics for Shipping (e.g. Bubble Wrap, Pallet Wrap)
Fresh food producers – import plastic packaging to seal their products.
Any organisation that manufactures or imports more than 10 tonnes of plastic packaging must register for the PPT, regardless of how much recycled plastic they contain.
Even if the PPT does not eventually expire, all organizations importing or manufacturing plastic packaging must comply with record-keeping requirements.
It is important to consider compliance obligations in advance.
For the purposes of the new tax, “plastic packaging” is defined as packaging that is primarily (i.e. more than 50%) plastic by weight.
PPT is paid by the manufacturer or importer at £200 per metric ton.
PPT will not expire unless 10 tons or more of plastic packaging is imported or produced within 12 months.
It is important to note that manufacturers and importers are required to pay taxes whether plastic packaging is filled or unfilled.
For example, if a business imports carbonated beverages in plastic bottles or ice cream in plastic tubs (with less than 30% recycled content), it needs to identify the plastic bottles/drums in the PPT.
Ensuring that every plastic packaging component your business handles is properly tax coded.
There are many factors to consider in order to complete this exercise, which can be time consuming and risk error if done manually.
Our tax team can help your business avoid risk and reduce your losses, reduce burdens and increase accuracy and consistency.