Further guidance issued on Plastic Packaging Tax

HMRC has issued further detailed guidance on the UK Plastic Packaging Tax (PPT), which will be introduced in April 2022.

The introduction of the plastic packaging tax is designed to encourage the use of recycled rather than new plastic within plastic packaging, and will increase levels of recycling and collection of plastic waste, diverting it away from landfill or incineration.

The tax will be paid on plastic packaging that does not contain 30% recycled content at £200 per tonne. It has been estimated that this will raise nearly a billion pounds in tax by 2025. The tax will apply to plastic packaging manufactured or imported into the UK (over 10 tonnes), with some exemptions including transport packaging on imported goods and plastic packaging for medicines.

Record Keeping

If you place more than 10 tonnes of plastic packaging on the UK market you will need to register, even if your packaging is exempt through recycled content.

All businesses that may be subject to the plastic packaging tax, especially if on the threshold of the 10 tonne de minimus, should keep records to demonstrate to HMRC that it does not need to register or that its plastic packaging is exempt.

This should include:
– Weights and materials used to manufacture the packaging.
– Data and calculation for recycled content.
– Amount, in weight, of plastic packaging exported.
– Documents to keep as a record:
– Product specification.
– Contracts.
– Production certificates and certificates of conformity.
– Business accounting systems.
– Accreditations and international standards.
– Quality assurance audits.
– Sales and purchase invoices.
– Invoice changes

If you are responsible for accounting for the tax as the manufacturer or importer of plastic packaging, any invoice you issue to a business customer must show a statement that Plastic Packaging Tax has been paid on the packaging concerned.

"We are advising all our members to internally audit and assess where this could impact them, through invoices, transport packaging and record keeping of exports for the tax relief credits. Getting data and evidence processes in place now will help for when the additional information is released by HMRC."

Sam Caplen, Account Manager at Clarity Environmental

HMRC has said further details of requirements will be available later this year.

Sam Caplen, Account Manager at Clarity Environmental, urged businesses to begin preparing for the upcoming changes. “It is essential that businesses who have any element of plastic packaging in their supply chain begin to prepare now. Regardless of the point of obligation for the PPT you may end up seeing some of these costs passed down through the supply chain.

“We are advising all our members to internally audit and assess where this could impact them, through invoices, transport packaging and record keeping of exports for the tax relief credits. Getting data and evidence processes in place now will help for when the additional information is released by HMRC.”

Further guidance for businesses, including how to prepare is available here: Get your business ready for the Plastic Packaging Tax

What is the Plastic Packaging Tax?

The UK government has confirmed its plans to introduce the new Plastic Packaging Tax from April 2022, with the aim of encouraging greater use of recycled plastic and to help tackle plastic packaging waste. The new tax will be delivered separately to the reform of the producer responsibility regulations, but the government believes that the two will complement each other and will provide businesses with the right incentives to recognise the impact of decisions around plastic packaging. They also hope it will drive the development – and use of – more sustainable packaging.

Prepare for Plastic Packaging Tax

We can help your business prepare for the impact of the Plastic Packaging Tax on your business. Find out more in our Plastic Packaging Tax web pages here.

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