Plastic Tax FAQs

Answers from our policy team to frequently asked plastic tax questions

The UK Plastic Packaging Tax comes into force on 1 April 2022 and directly affects importers and manufacturers of plastic packaging in the UK. Below are the answers to common questions we get asked in relation to the plastic tax, which are designed to address plastic tax liability.

What is the plastic packaging tax?

The Plastic Packaging Tax is a measure put in place by HMRC as part of the UK’s resources and waste strategy to encourage the usage of recycled material in plastic packaging in the UK.

From 1 April 2022, plastic packaging components manufactured in and imported into the UK will be liable for a specific material tax where it does not meet a minimum recycled content of 30% by weight.

How much will the plastic tax cost?

Plastic packaging components where the amount of plastic in the component does not contain 30% recycled content by weight will be charged at a rate of £200 per tonne.

Components with a plastic content exceeding 30% recycled content will not be liable for the tax.

How is the plastic tax paid?

Businesses manufacturing or importing liable components will be required to submit quarterly returns to HMRC detailing how much liable packaging they have handled and pay the associated tax.

Who does the plastic tax impact?

Directly (likely to pay tax):

  • Importers of finished goods in plastic packaging
  • Importers of empty plastic packaging
  • Plastic packaging manufacturers

Indirectly (cost of products increase):

  • Businesses selling or handling products in plastic packaging
  • Consumers
  • Waste management companies

What is an example of how the plastic tax impacts a business?

Example 1: Business A

  • 200T of 100% virgin plastic packaging manufactured
  • Tax payable at rate of £200 a tonne
  • Eg. For 200T: £200 x 200T = £40,000

Example 2: Business B

  • 200T of packaging imported, 100T from supplier who can demonstrate 30% recycled content
  • Tax payable at rate of £200 a tonne
  • Eg. for 100T: £200 x 100T = £20,000

Is the plastic tax additional to PRN costs?

Yes, this is completely separate and although HMRC consider it to “complement” the EPR changes, the two will run parallel.

Is there a minimum amount of packaging handled to qualify for the plastic tax?

Yes, businesses will need to handle more than 10 tonnes of plastic packaging to be required to pay the tax.

Do I just register through my compliance scheme for the plastic tax?

No, as this is being managed as a formal type of taxation, businesses whom exceed the registration threshold of 10T will need to register directly with HMRC to ensure they pay the tax. The tax will be paid and reported on a quarterly basis.

How do I register for plastic packaging tax?

The information from HMRC you’ll need and links to register are all as follows:

Register for Plastic Packaging Tax

Register a group of companies for Plastic Packaging Tax

Guidance:

  1. Online services may be slow during busy times
  2. Sign in using Government Gateway user ID and password
  3. You can save your progress as you complete the registration
  4. You can make updates and change some of the registration details once submitted e.g. for groups

Are there any plastic packaging exemptions from the tax?

Currently, there are four accepted exemptions proposed by HMRC for plastic packaging:

• Used in aircraft, ship and rail goods stores
• Used as transport packaging on imported goods
• Used in the immediate packaging of a medicinal product
• That are permanently designated or set aside for use other than for a packaging use

What does Joint and Several Liability mean?

Liability is Joint and Several for the plastic tax. 

In simple terms, this makes the entire supply chain responsible for ensuring the tax has been paid and enables HMRC to collect the tax from parties in the supply chain other than the first obligated business, if they are unable to collect from the first obligated party.

What happens with the plastic tax if I export my products?

Exports are not obligated under this tax, however, the government is consulting to determine the best method of removing exports from the payable figures. It is expected that the tax would be payable on items as usual, and then credited when proof of export can be provided.

How is the plastic tax calculated for packaging with multiple components?

Each individual component is counted as a separate entity in this tax and would be considered separately. The definition of
componentry is currently defined as being “separable by hand”. A bottle, cap and label would likely be considered different components and therefore, the 30% would be separately calculated for each component rather than the final consumer packaging.

What is classed as “recycled plastic” for the purpose of defining recycled content?

The government definition includes post-consumer plastic waste and pre-consumer plastic waste, with the exception of scrap and
re-grind material. This definition is in line with ISO 14021:2016.