Plastic packaging tax advice

Plastic packaging tax explained

The UK plastic packaging tax was introduced on 1 April 2022. The rate is £223.69 per tonne on plastic packaging tax with less than 30% recycled content for the 2025/26 tax year. We expect this to increase in line with inflation from 1 April 2026.

The tax applies to UK plastic packaging manufacturers and importers of plastic packaging, including packaged goods, who are responsible for producing or importing more than 10 tonnes of plastic packaging per year.

The registration threshold

If your company is under the 10-tonne registration threshold for plastic packaging tax, you don’t need to do anything. However, retaining your workings showing you are under the threshold is good practice in case HMRC ask. It is also advisable to review your position periodically.

In assessing whether the 10-tonne threshold has been reached, you need to count the following:

Plastic packaging you manufacture in the UK
Empty (or bare) plastic packaging you import into the UK
Semi-finished plastic packaging you finish in the UK
Primary plastic packaging on goods that you import into the UK (for example, bottles, wrappers and caps) that are in contact with the product
Secondary plastic packaging on goods that you import into the UK (for example, shrink wrap that holds trays of items together for shelf-stocking and plastic liner bags inside boxes)

Plastic packaging that is not subject to tax – if it has 30% or more recycled content or benefits from the medical packaging exemption, for example – should be included when calculating whether the 10-tonne threshold has been exceeded. The only items which should not be counted in deciding whether the 10-tonne limit is reached are:

Plastic packaging that falls within one of the exclusions
Transport packaging on imported goods
Stores for international aircraft, ship and rail journeys

Relief for 30% recycled content

If you want to claim the relief from plastic packaging tax for items that contain at least 30% recycled content, HMRC requires specific evidence:

Show how you have worked out the percentage of recycled content
Supply sufficient supporting evidence that recycled plastic was used
State the dates that this evidence relates to, such as the dates that the components were manufactured or imported
State which packaging component the percentage relates to. This can be done at either product line or production run level
Give an accurate reflection of the proportion of recycled plastic contained in the output materials of the recycling process
Confirm the source of the recycled plastic
Provide product specifications and due diligence checks for imported components

Plastic packaging tax guidance

Plastic packaging tax is an evolving part of the UK tax landscape and war on climate change. To make sure you are paying the right amount of tax, it’s vital to have expert help.

We can help you:

Assessing whether or not you have to register for and comply with plastic packaging tax
Training key business stakeholders
Developing processes and controls for plastic packaging tax management
Determining how packaging components will be treated for tax purposes
Data collection and processing
Dealing with plastic packaging tax within your systems
Preparing plastic packaging tax returns
Answering technical queries
Offering supply chain due diligence
Liaising with HMRC to agree on the tax treatment of complex or uncertain areas
Assisting with HMRC enquiries and investigations

Talk to S&W

If you have any queries about plastic packaging tax and its impact on your business, call one of our experts now.

Jayne Harrold

Partner

Message +44 204 617 5408

Birmingham

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Frequently asked questions about plastic packaging tax

What is joint and several liability, and secondary liability?

If you transport, store or deal in plastic packaging (including packaged goods) that should have been subject to plastic packaging tax, then you could be required by HMRC to pay any unpaid plastic packaging tax that someone else in the supply chain should have paid.

The best protection from joint and several liability and secondary liability is to have good supply chain due diligence in place.

If you receive a joint and several liability notice from HMRC, it will specify the supplier it relates to. You should immediately make additional checks with that supplier and stop doing business with them if you are not satisfied that they are properly meeting their plastic packaging tax obligations.

Does plastic packaging tax apply to imported goods sold on to someone else?

Yes, it does. If you import more than 10 tonnes of plastic packaging a year, you must register and comply with plastic packaging tax.

You need to count the primary packaging, which is the packaging in contact with the goods or making up the individual sales unit, and the secondary packaging used to group a number of units together.

Tertiary packaging on imported packaged goods is exempt from plastic packaging tax and does not count towards your 10-tonne registration threshold. However, imports of empty tertiary packaging into the UK, such as rolls of shrink wrap, are not exempt and should be counted.

Is plastic packaging tax vatable?

If you add plastic packaging tax to your invoices to customers, either as a separate line or as part of the overall price, it forms part of the net price paid by the customer for the goods. The net price is subject to VAT in the usual way. Any increase in the net price caused by plastic packaging tax is also subject to VAT.