The New Plastic Packaging Tax

The New Tax

The new UK Plastic Packaging Tax (PPT) will come into force on 1 April 2022 and will be charged at a rate of £200 per tonne. The legislation is structured to incentivise the use of recycled material in the production of plastic packaging.

This measure will impact UK plastic packaging manufactures and importers of plastic packaging.

The Tax Requirements

HMRC state that you need to register for the Plastic Packaging Tax if you’ve manufactured or imported 10 or more tonnes of finished plastic packaging components within the last 12 months, or will do so in the next 30 days. From 1 April 2022 to 30 March 2023, the 12 months threshold will be worked out differently.

Plastic Packaging Tax only applies to manufacturers and importers of plastic packaging components which contain less than 30% recycled plastic. Packaging should only contain recycled plastic where it is permitted under other regulations and food safety standards.

Considerations for Import, Export and Transport Teams

Transport Packaging

HMRC have stated that transport packaging used to import goods into the UK is exempt from Plastic Packaging Tax if it is used to both:

• transport multiple sales units or grouped packaging
• prevent damage during transportation

You should consider how this packaging is used, rather than the type of packaging it is, when determining if the exemption applies. 

What is covered by the exemption?

Examples of items covered by this exemption (when used to prevent damage of multiple sales units or grouped packaging imported into the UK) include:

• road, rail, ship or air containers used to import goods into the UK
• pallet wrap
• straps
• plastic pallets

What is not covered by the exemption?

Examples of items not covered by this exemption, that are subject to the tax, include:

• crates that act as primary or secondary packaging, and are used for transporting goods into the UK for delivery to a consumer or supplier (this includes items such as fruit and vegetables)
• transport packaging:

                                       a) used to transport goods within the UK

                                       b) manufactured in the UK

                                       c) imported into the UK as goods in their own right

                                       d) used to import a single product into the UK

• large containers used to import alcohol to be bottled

Exporting Finished Plastic Packaging

HMRC state that you can claim a credit or relief for finished plastic packaging which is exported from the UK if:

• at the point you manufacture or import the finished plastic packaging, you intend to export the packaging yourself
• you pay Plastic Packaging Tax when you manufacture or import the packaging and it is subsequently exported by you or someone else — you can then claim back the tax for up to 2 years from the date that you manufactured or imported the packaging

You cannot claim relief for transport packaging used to export goods from the UK.

Record Keeping

HMRC state that you must keep accounts showing how you’ve worked out each entry on your quarterly tax return. Where relevant, your accounts must include:

• 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
• converted into new packaging components
• any adjustments or corrections made to previous accounting periods — you must include the date and the accounting period they relate to

You must keep accounts by reference to each ‘product line’ that you produce or import. A ‘product line’ is a group of plastic packaging components produced to the same specification.

If you would like more details, please call +44 (0) 118 932 8447 or email:  info@icsglobalservices.co.uk 

ICS Global Services Limited