Amended plastic packaging tax legislation

The Plastic Packaging Tax (General) (Amendment) Regulations 2023 (SI 2023/622) (“New Regulations”) came into force on 1 July 2023.

What is plastic packaging tax?

Plastic packaging tax (“PPT”) was first introduced 1 April 2022 as part of the government’s Resources and Waste Strategy. PPT is the tax charged on finished plastic packaging components that are manufactured, or imported into the UK, and contain less than 30% recycled plastic.

A business which accounts for PPT may claim a tax credit if they, or another business, export a chargeable plastic packaging component from the United Kingdom or convert it into another packaging component.

PPT helps to encourage the use of recycled plastic in packaging and to divert plastic away from landfill or incineration. Alongside other measures, PPT supports the government’s ambition to eliminate avoidable plastic waste by 2042.

What changes do I need to be aware of?

The New Regulations change the way tax credits are claimed in respect of PPT by specifying how they are accounted for in a tax return. This change ultimately makes sure that guidance and legislation are in alignment.

Who is likely to be affected by this change?

UK manufacturers of plastic packaging, importers of plastic packaging, business customers of manufacturers and importers of plastic packaging, and consumers who buy plastic packaging or goods in plastic packaging in the UK are likely to be affected by this change.

It is worth noting that there is an exemption for small businesses (which are classed as businesses employing up to 50 people) manufacturing and importing less than 10 metric tonnes of plastic packaging in any 12-month period from registering for and paying the tax. This is to try to mitigate against disproportionate administrative burdens in comparison to the tax liability.

Businesses close to the threshold are encouraged to keep some basic records to demonstrate that they fall below this threshold, but in many cases their normal business records should meet this requirement.