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Plastic Packaging Tax

Brief overview

  • The Tax applies to any business that manufactures plastic packaging in the UK, or imports empty or filled plastic packaging where the individual components of the packaging contain less that 30% recycled content.
  • Businesses that manufacture and/or import >10 tonnes a year must register with HMRC.
  • Transit packaging used for imports is exempt and qualifying packaging that is exported is not liable for the tax.
  • The Tax applies to qualifying plastic packaging manufactured or imported from 1st April with the first quarterly return due by 31 July.
  • HMRC registration is open from 1 April but as yet, we do not have details of the registration process.
  • Claiming that packaging meets the 30% recycling content to be exempt from the tax requires evidence of that content. HMRC has advised:

'HMRC will not be mandating specific records which need to be retained as evidence. You should keep any records and documents you have received or have produced that will be used to inform your tax return, including any exemptions or reliefs claimed. To support businesses, we have published guidance on GOV.UK giving examples of the type of records you will need to keep.'

HMRC has a range of detailed information linked below.


Steps to take when deciding if you should pay the tax  (HMRC as at 04/02/22)

  1. Work out which packaging is subject to Plastic Packaging Tax.

  2. Decide if you need to register for the tax.

  3. Work out the weight of the packaging you manufacture or import.

  4. Check when you must register for the tax.

  5. Find out how to register.

  6. Check which records and accounts you must keep and how to carry out due diligence.

  7. Read how to claim a credit or defer paying Plastic Packaging Tax (if applicable).

  8. Find out how to complete your return.


Update from HMRC - 17th December 2021

Good afternoon,

To continue supporting preparations for the introduction of Plastic Packaging Tax (PPT) from April 2022, we are sharing the following updates.

PPT guidance: new information published

HMRC has published further updates to the main PPT guidance on GOV.UK. These updates include further information on:

  • Examples to aide understanding of what packaging is subject to the tax or not. This also reflects secondary legislation which has been refined to provide greater clarity on this aspect of the tax.
  • PPT statement on invoices – clarifying this requirement has been postponed for 1 April 2022
  • How VAT interacts with PPT
  • Examples of applying the 10 tonnes registration threshold, direct exports, claiming tax credits and calculating whether multi material packaging components are plastic 
  • Information on the records and accounts that businesses will be required to keep to support the information submitted on returns, including examples of the types of documents that can be used as evidence for the plastic and recycled plastic content of packaging.

We are listening to feedback from industry and these updates reflect where businesses have asked for more support, for example on understanding what plastic packaging is taxable. Further updates will be added to the guidance and we will communicate these as they become available.

PPT regulations update

Plastic Packaging Tax (Descriptions of Products) Regulations 2021

Earlier this year, HMRC ran a technical consultation on a draft version of The Plastic Packaging Tax (Descriptions of Products) Regulations 2021. These regulations remove three categories of products from the meaning of a plastic packaging component and add a further category of products. We are grateful to those who inputted on this. Following consultation feedback, we have refined some of the legislation wording, to provide greater clarity on what plastic packaging is subject to the tax. This updated legislation was laid in parliament on Monday 13 December. The updated legislation and Explanatory Memorandum are available online at https://www.legislation.gov.uk/uksi/2021/1417/contents/made.

The guidance on GOV.UK linked above has been updated to align with the latest legislation.

The regulations above are enacted through the Finance Act Part 2

Plastic Packaging Tax (General) Regulations 2022The recent technical consultation on The Plastic Packaging Tax (General) Regulations 2022, which covers the tax’s administration technical details closed on 1 December 2021. Thank you to those who provided feedback on whether this legislation worked as intended, we are in the process of analysing the feedback received. Once finalised, the legislation will be laid before parliament in the new year.

All draft legislation for PPT has now been published and consulted on.

Webinar recordings

A reminder for those who may have been unable to attend the recent HMRC webinars on PPT, or would welcome seeing these again; recordings of both the ‘Introduction to Plastic Packaging Tax’ and ‘Plastic Packaging Tax – Administration and technical aspects’ sessions are available on GOV.UK at https://www.gov.uk/guidance/help-and-support-for-agents#plastic-packaging-tax.

Kind regards,

Eleanor Coyne

Excise & Environmental Taxes Policy Design Team | Indirect Tax | Customer Strategy & Tax Design | HM Revenue & Customs | indirecttaxdesign.team@hmrc.gov.uk


Update from HMRC - 4th November 2021

With less than 6 months to go until Plastic Packaging Tax (PPT) comes into force from 1 April 2022, we are providing the below updates to help you continue preparing for the tax’s introduction. We are also sharing recent technical announcements relating to the tax.

Guidance: first part of full guidance now available
HMRC has published the first part of PPT’s full guidance on GOV.UK. This update provides new information, for example what to include on a tax return for PPT, and what other substances need to be considered for multi material packaging. The update also brings previously published guidance into the full guidance format, so all information businesses need to prepare for the tax will be together in one place.

Further additions to the full guidance will be published in stages later this year, and we will communicate these with you as they become available.

Webinars – dates still available and recordings
The first HMRC webinars on PPT took place late last month. Recordings of both the ‘Introduction to Plastic Packaging Tax’ and ‘Plastic Packaging Tax – Administration and technical aspects’ sessions are now available to view on GOV.UK at https://www.gov.uk/guidance/help-and-support-for-agents#plastic-packaging-tax.

Due to popular demand, we added further dates for both webinars. Some spaces remain available, so sign-up now to learn more about what you need to do before the tax comes into force from 1 April 2022. HMRC’s webinars also give you the opportunity to ask any questions you may have regarding the administration of the tax.

Get Ready for Plastic Packaging Tax – Introduction to PPT Webinar: additional date added for 22nd November at 13:45 GMT. This webinar will cover how the tax will operate. Topics will include:

  • what plastic packaging the tax applies to
  • who is responsible for paying and accounting
  • tax returns (reporting) and record keeping.

Sign-up now by visiting https://register.gotowebinar.com/rt/1050128580687287821?source=Gov

Get Ready for Plastic Packaging Tax – Administration and technical aspects Webinar: spaces still available for 12th November at 11:45 GMT. This webinar will cover the technical points about recycled plastic and exemptions from the tax. Topics will include:

  • exports and tax credits
  • supply chain responsibilities
  • types of recycling, calculating
  • evidencing weight of packaging
  • evidence for exemptions.

Sign-up now by visiting https://register.gotowebinar.com/rt/5605188650921164814?source=Gov

PPT further secondary legislation for technical consultation
Building on the secondary legislation published in draft earlier this year, we are now sharing further draft secondary legislation for technical consultation. The legislation published today provides the technical detail relating to administration of the tax, such as registration requirements, filing returns, record keeping and evidence.

The technical consultation on the further draft secondary legislation is available on GOV.UK  and consists of the following documents:

  • The Plastic Packaging Tax (General) Regulations 2022 draft Statutory Instrument
  • Draft explanatory memorandum on the Plastic Packaging Tax (General) Regulations 2022

The government welcomes feedback on whether the legislation works as intended. The technical consultation runs from 4 November to 11:45pm on 1 December 2021. Please provide any comments to indirecttaxdesign.team@hmrc.gov.uk.

Autumn Budget 2021

Last week’s Budget included a measure for Plastic Packaging Tax. The measure introduces minor technical changes to the Plastic Packaging Tax primary legislation contained within Part 2, Schedule 9 and Schedule 13 of Finance Act 2021. The changes are to ensure that the tax operates as intended, that the UK complies with international agreements, and that HMRC has the appropriate framework to administer the tax.

 

You can read more about this technical change in the updated Tax Information and Impact Note (TIIN) on GOV.UK.


Updated Plastic Packaging Tax guidance - published 24 Sept 2021

To tackle the pressing global issue of plastic pollution, the government is committed to introducing a world leading tax on plastic packaging from April 2022.  The Plastic Packaging Tax will create a clear economic incentive for businesses to use recycled plastic material in the production of plastic packaging, in turn stimulating increased levels of recycling and collection of plastic waste and diverting it away from landfill or incineration. 

The tax will be paid by manufacturers and importers of plastic packaging (including plastic packaging filled on importation) that contains less than 30% recycled plastic and will be set at a rate of £200 per tonne.

To ensure the tax does not disproportionately impact small businesses, those that manufacture or import less than 10 tonnes of plastic packaging each year will not need to register or pay the tax. All businesses above this threshold must register, including businesses who already include more than 30% recycled plastic in their packaging.

To support businesses, HMRC published ‘Get your business ready for the Plastic Packaging Tax’ guidance on GOV.UK, which provides an overview and further information on the tax. The ‘Further information for businesses’ part of the guidance has recently been updated to provide further detail on:

  • The types of plastic packaging subject to the tax, including single-use products, such as carrier bags, sandwich bags and disposable cups.
  • Who is liable for the tax and when it is charged, by clarifying what is considered ‘last substantial modification’.

HMRC has also produced two ‘decision tree’ documents to provide a step-by-step guide to help business determine if plastic packaging is in scope of the tax, and who is required to account and potentially pay the tax. The decision trees are attached to this email.

Queries?

More detailed guidance and support to businesses will be provided in the coming months. Any queries on the tax should be directed to HMRC, using the contact details in the guidance

Presentations

HMRC Introduction to the PPT 20 Oct 2021

HMRC Administration and Technical 26 Oct 2021

Guidance Documents

Liability to register guide

Scope decision tree guide

Plastic Packaging Tax Regulatory Amendments (27 Oct)


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