UK’s new Plastic Packaging Tax – what it means for importers, exporters, and producers
By Gaby Grzywacz, Haines Watts
Effective 01 April 2022, the UK has introduced a new Plastic Packaging Tax (PPT), which affects importers, exporters, and producers of plastic packaging. Such businesses are required to register for PPT if they import or produce 10 or more tonnes per annum. PPT also applies to non-resident entities.
PPT applies to plastic packaging, either produced in or imported into the UK, containing less than 30% recycled materials at the rate of GBP 200 per tonne; this includes both plastic used in the supply chain and plastic supplied to consumers for single use.
Although not subject to PPT, it should also be noted that packaging containing more than 30% recyclable materials will still count towards the 10 tonne threshold. Businesses should consult a professional adviser to determine which types of packaging count as plastic.
The important commercial/ contractual matter to consider, and an added complexity, is whether the PPT will be payable by either the exporter, or the importer, of plastic packaging into the UK. It is advised that the PPT-responsible person should be agreed in writing between the parties before goods are imported into the UK – i.e., who is responsible for accounting for the tax, which may depend on the incoterms used.
PPT returns need to be filed quarterly, by the end of the month following the end of the quarter. While the tax is only due on plastic packaging with less than 30% recycled material, the weight of plastic produced or imported that has a higher recycled content still needs to be declared on the return. As a result, businesses need to track all the plastic packaging they import, export or produce.
While plastic packaging exported from the UK is not subject to PPT, it should still be included in the return if the reporting business is registered for the tax, meaning that theoretically, no one involved in plastic packaging in the UK is free from the new compliance requirements.
Please note that the legislation is still being updated, with new updates to the mechanics of PPT being published on regular basis.
Gaby GrzywaczGGI member firm
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More than 60 offices throughout the UK
T: +44 207 025 4656
With over 60 offices around the UK, Haines Watts is a UK Top 15 firm of Chartered Accountants specialising in the owner-managed business sector. Assisting over 35,000 business owners around the UK, Haines Watts supports business owners’ aspirations and help them to achieve their goals.
Gaby Grzywacz is a VAT Manager at Haines Watts, a leading provider of business advice and accounting services to owner managers operating in the UK and abroad.
Published: Indirect Taxes Newsletter, No. 13 Spring 2022 l Photo: Evgeniy Kalinovskiy - stock.adobe.com