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When you’re concentrating on running your business and building your empire, it can be super tricky to find the time to stay on top of all things tax. However, if you find yourself out of the loop with the latest updates, you run the risk of not paying categories of tax you may very well be liable for.

Plastic Packaging Tax (PPT) is a relatively new type of tax introduced in April 2022 that you might not be aware of, but could potentially be liable for. Don’t worry though, we’re here to help you figure it all out.
 

What is Plastic Packaging Tax?

Who needs to register for Plastic Packaging Tax?

What are finished plastic packaging components and modifications?

Is biodegradable plastic subject to Plastic Packaging Tax?

How to register for Plastic Packaging Tax

Are there any exemptions to Plastic Packaging Tax?

It’s estimated that 5,000 items of marine plastic pollution can be found per mile of beach across the UK alone. It’s also estimated that one bin lorry of plastic is discarded into the world’s oceans every single minute. It comes as no surprise then, that consumption and waste of plastic is having a colossal impact on climate change and global warming.

One of the ways the UK government is helping tackle the problem of plastic pollution is by introducing Plastic Packaging Tax (PPT). This is an environmental tax designed to reduce the use (and waste) of non-recycled plastic and single-use plastic in product packaging.

PPT is charged at a rate of £200 per tonne for those who meet the liability criteria

It aims to motivate increased use of recycled plastics and therefore:

In 2021, 2.5 million metric tonnes of plastic packaging waste were generated in the UK. The requirement for manufacturers and importers of plastic packaging to start paying PPT is part of wider efforts to address plastic pollution and become more sustainable.

Plastic Packaging Tax was implemented on 1st April 2022, so it’s important to establish whether or not you’re liable and if so, ensure you’re registered to pay the necessary PPT.
 

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The government’s overarching guidance on the matter is that if you manufactured or imported 10 tonnes or more of plastic packaging since 1 April 2022, you may need to register for Plastic Packaging Tax.
Of course, tax is never completely straightforward, so there are further specifics on who is liable for PPT as well as some exemptions.

You will need to register for Plastic Packaging Tax and pay PPT if you are a manufacturer or importer who falls into either (or all) of the following categories:

Note: the first point on this list will change as of 31st March 2023, when manufacturers and importers will then be required to assess the previous 12 months on the last day of each month.

You need to register within 30 days of meeting the 10 tonnes threshold, and if you fail to meet this deadline, you could incur a financial penalty.

Plastic Packaging Tax only applies to finished components or finished products. For tax purposes, the government considers it to be ‘finished’ if it’s already filled with goods, in which case it’s treated as a finished packaging component, and you’ll be liable for the tax.

So, if you’re a manufacturer, or if you import unfilled plastic packaging, you’ll need to work out when the packaging component is finished.

A packaging component is considered ‘finished’ only once it has been through its final substantial modification. Whoever carries out the final substantial modification, before the packing or filling of packaging, is the business (or person) liable for PPT.

A substantial modification includes any process that changes the product’s shape, structure, thickness or weight.

In some cases, maybe. For the purposes of working out if Plastic Packaging Tax applies, a plastic is a polymer material which may contain additives or other substances. It can include polymers which are biodegradable, compostable, or oxo-degradable.

A cellulose-based polymer won’t be treated as plastic for PPT as long as it has not been chemically modified. Those that have been chemically modified are considered plastic.

 

You should use your Government Gateway account to sign in and register online for Plastic Packaging Tax.

To register, you’ll first need information about the quantity of plastic packaging you:

You’ll also need the following to hand:

As the current regulations stand, there are four types of packaging components that are exempt from Plastic Packaging Tax, irrespective of the quantity of recycled plastic they contain. They are:

It’s important to note, however, that even where the first two of these exemptions apply, you still need to take this packaging into account when calculating whether or not you are manufacturing or importing over 10 tonnes of plastic packaging within a 12-month period. This isn’t the case for the second two exemptions on the list above though.

In circumstances where plastic packaging is due to be exported, payment of PPT can be deferred for up to 12 months, providing necessary requirements are met. If the plastic packaging is exported within the 12-month timeframe, Plastic Packaging Tax liability is removed.
 
 
Our online accountants provide a range of accountancy services for businesses like yours, including support for tax liability and relief. Talk to an advisor by using the live chat button on your screen, calling 020 3355 4047, or get an instant online quote.

About The Author

Stephanie Whalley

Serial snacker, compulsive cocktail sipper and full time wordsmith with a penchant for alliteration, all things marketing and pineapple on pizza.

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