FAQ: the UK Plastic Packaging Tax
To tackle the issues of plastic pollution, from April 2022 plastic packaging containing less than 30% recycled plastic will be subject to the Plastic Packaging tax (PPT). Companies face being charged £200 per tonne on any plastic packaging containing 30% or less recycled material. Machinery distributor Summit Systems has compiled this handy list of FAQs to help navigate the changes.
Am I liable?
If you are producing packaging which predominantly (by weight) comprises of plastics components, and does not contain 30% or more recycled material, you will be liable to the tax.
Examples:
• If you produce a bottle top ready to be placed on a bottle, you will be liable to pay the tax.
• If you produce food packaging which is predominantly made of plastic, you are liable.
Am I exempt?
There are several reasons why you may be exempt from the tax, but it is worth checking to ensure that you are compliant.
If you manufacture packaging for licensed medicines, but not for medical equipment, you are exempt. If your packaging is used as aircraft, ship, and rail stores for international journeys, you are also exempt.
If you are a business producing or importing under the 10 metric tonnes threshold, you are not liable to pay the PPT, however you will still need to maintain sufficient records. Likewise, if your packaging contains over the 30% recycled content threshold, you will also need to keep the evidence of this to support your tax return, but you will not be charged.
If your plastic packaging is manufactured for export, you can defer paying the PPT, but again your records will need to highlight this. Alternatively, if you have paid tax on packaging which has later been exported, you can apply for a credit, but will need sufficient evidence to support this.
NOTE: You must keep your records for 6 years from the end of the accounting period they relate to.
What do I need to do to prepare for the PPT?
You will need to have registered for Plastic Packaging Tax by April 1st, 2022, and by April 30th you will need to have told HMRC if you are liable to register, because you meet any of the following criteria:
If you have manufactured or imported 10 or more tonnes of plastic packaging within the last 12 months, or if you plan to do so in the next 30 days.
- If you are a non-resident taxpayer who imports finished plastic packaging into the UK on their own behalf or manufactures finished plastic packaging in the UK.
You should check each month how much finished plastic packaging you have manufactured and imported, and if you meet or exceed the 10 tonnes threshold, you will be liable from the first day of that month. You will have 30 days to register from the date you met or exceeded the limit.
Note: Businesses that manufacture or use more than 10 tonnes of plastic packaging a year should register for the tax, whether their plastic packaging is 30% recycled or not.
How do I complete my Plastic Packaging Tax return?
Your returns will need to be submitted to HMRC, and include the total weight of finished plastic packaging manufactured in the UK, and must cover the following accounting periods:
1 April to 30 June
- 1 July to 30 September
- 1 October to 31 December
- 1 January to 31 March (2023)
For further information on how to complete your tax return, click here.
Areas of uncertainty
Whilst we endeavour to provide accurate information, there will always be areas of uncertainty.
It has not been confirmed by the Government whether using your own regrind in your facility is acceptable. However, it is our understanding (following advice from the BPF) that you can utilise your own regrind providing it is used on an alternate product line to its original purpose.
For example, if you have two production lines within your facility, one for plastic bottles and one for plastic boxes, you could use the regrind from the plastic bottle line and recycle it on the plastic boxes line, and vice versa.