Essentia Global Services – European / International / Global vat tax compliance consultants and management agents.

Plastic Packaging Tax UK

From 1 April 2022 a new tax will be introduced in the UK in relation to plastic packaging. Businesses that manufacture
plastic packaging in the UK, or import into the UK plastic packaging components or packaged goods containing plastic
packaging, may be liable to pay the Plastic Packing Tax. The rate of tax will be £200 per tonne of plastic packaging
placed on to the market.

Which businesses are subject to Plastic Packaging Tax?

Businesses will need to review their packaging products to determine whether they classify as plastic. There are two
different types of Plastic Packaging Tax that are subject to the tax:
• Use in the supply chain
• Single use by the consumer
It is important to consider that if the packaging is made up of various components, there will be a need to account for
tax on each of those elements.
Plastic packaging that contains 30% or more recycled plastic is not subject to the tax.

When will businesses have to register for Plastic Packaging tax?
Businesses will need to register for Plastic Packaging Tax if they have manufactured or imported 10 or more tonnes of
finished plastic packaging elements in the last 12 months, or will do so in the next 30 days. This includes non-resident
taxpayers that import finished plastic packaging into the UK or manufacture it in the UK.

Which records should be maintained in order to comply with the new rules?

Businesses need to ensure that they keep all the records used in order to prepare the plastic packaging tax return.
This will include:
• A breakdown of the weight of plastic packaging components finished or imported in each period
• The weight of plastic packaging exported in the period on which the tax was deferred
• A breakdown of the weight of any plastic packaging for which a credit is claimed if the packaging has been:
– Exported
– Converted into new packaging components
• Any adjustments or corrections made to previous accounting periods – including the date and the accounting
period they relate to
Businesses must keep accounts by reference to each ‘product line’ that are produced or imported. A ‘product line’ is a
group of plastic packaging components produced to the same specification.

When can businesses register for Plastic Packaging Tax?

Business that are required to do so will be able to register from 1 April 2022. It is important to note that even if the plastic
meets the 30% recycled criteria, businesses will still need to register and submit returns with proof of the 30% or more
recycled status.

What actions should businesses take now?

Businesses will need to determine whether any products they import or manufacture qualify as plastic packaging in line
with the new legislation. They will also need to determine whether they are subject to register as a result of breaching
the threshold and ensure sufficient data can be generated in order to report accurately. There are some particular rules
around which party in the supply chain is obliged to account for the tax; customers and suppliers should be contacted
as early as possible to ensure that all parties in the supply chain are informed of the changes.