Plastic Packaging Tax

Plastic packaging tax is one of a range of measures included in the UK government's; "Our Waste, Our Resources" plan designed to protect resources and limit the environmental impact of waste.

Plastic Packaging Tax has recently been increased from £210.82 per tonne to £217.85 per tonne. The new rate will be liable from 1st April 2024.

The UK government has introduced a range of legislation designed to move the UK towards a more circular economy, where resources are maximised, and waste is minimised.

PPT is an environmental tax designed to provide a financial incentive for businesses to reduce their use of single use virgin plastic and increase their use of recycled plastic. 30% recycled packaging is PPT exempt, raising the demand for PCR plastic, making plastic waste more valuable and helping to divert it away from landfill or incineration.

Most plastic packaging products will be affected, including; packaging with less than 30% recycled content and imported products, such as drinks in plastic bottles.

The tax only applies to plastic packaging manufactured or imported into the UK; this means that goods imported and then exported within a twelve month timescale may be eligible for a credit from HMRC. Invopak includes PPT as a separate line on your invoice to help make these costs clear.

What are the alternatives to standard plastic?

There are a range of alternatives available including packaging made from PCR, tin plate and aluminium.

Post Consumer Resin (PCR)

PCR is also called post consumer recycled, post consumer regrind or post consumer recyclate, they all refer to products that contain recycled plastic. PCR products that include 30% or higher levels of recycled plastic are not liable for PPT.

For the container to maintain its integrity & performance, it has to have the right blend of PCR and virgin material, which is why the threshold is 30%. At Invopak we are increasing our PCR range as more products come to market, including a new PCR bucket range, as well as a wider variety of Jerry cans and HDPE bottles. See our full range of Recycled Containers here.

Metal Packaging

Metal packaging is exempt from the tax, so aluminium bottles, lever lid tins and metal pails are unaffected. Even if a metal container includes plastic parts, as long as plastic is not the heaviest component PPT will not apply, so a metal bottle with a plastic shroud is not liable for the PPT charge.

We are one of the biggest suppliers of metal packaging in the UK and they are one of our fastest growing ranges. Metal can also be recycled forever, making it an excellent choice for the environment. See our full selection of metal containers here.

FAQs

What is plastic packaging tax?

It is a UK tax charged on manufactured and imported plastic packaging products from April 1st 2022.

I am not an importer or manufacturer so why am I being charged PPT?

Just like any tax, the cost of PPT will ultimately be paid by the end user. We are adding PPT as a separate line on your invoice, rather than a blanket percentage increase, to be fully transparent with the amount on your invoice that is due to the new tax.

Why are we being charged PPT when our products are exempt?

Due to the way the tax is applied, Invopak cannot manage customer exemptions so PPT would still be charged. A credit claim can be made directly to HMRC for any PPT paid on exempted products.

Why are we being charged PPT on products we are exporting?

PPT must be paid on any products imported or made in the UK. If that product is then exported within 12 months, then a claim for credit may be made to HMRC on proof of export. For examples please click the link below:

HMRC Claiming Plastic Packaging Tax Credits

How much is plastic packaging tax?

From the 1st April 2023 plastic packaging tax will be charged at a rate of £210.82 per tonne.

Which Invopak products are liable for the tax?

All of our plastic products, including Plastic Buckets, Tubs, Jerry Cans, Drums and Bottles and Caps will be liable for the tax. The only exceptions are products made from 30% PCR-recycled plastic.

Is recycled plastic packaging exempt?

Yes, PCR packaging is exempt, as long as it is made from 30% or more recycled plastic.

Do you have to pay PPT on mixed material products?

Yes: If the main component, by weight, is plastic. In this case, tax is charged based on the weight of the entire product and not just the plastic part, so the metal handle of a plastic bucket will be included in the PPT calculation.

No: If the main component, by weight, is not plastic, the product is exempt. For example, an aluminium bottle with a plastic sealing shroud would not be liable for PPT.

What is classed as packaging?

For the purposes of PPT, packaging is defined as products used for the containment, protection, handling, delivery and presentation of goods.

Who needs to register for PPT?

Businesses need to register for PPT if they have manufactured or imported 10 tonnes, or more, of plastic packaging within a 12 month period.

Please click the link below for a step by step guide from HMRC:

Step-by-step guide to registering for PPT

Will PCR products be cheaper?

Not always. PCR is becoming more expensive as demand increases, and it also requires complex manufacturing processes to produce, which means that PCR may present environmental savings rather than financial ones.

Can I use PCR for Food and Beverages?

No. PCR plastics are not currently Food Grade or UN certified, though technologies are evolving in this area. Multi-layer products that have a PCR core with virgin plastic layers can be used for consumables and are a better environmental option than a standard bottle.

Is Transport packaging exempt?

PPT does not apply to Tertiary or Transport packaging as long as it is used to transport multiple sales units or grouped packaging AND to prevent damage during transportation. This means that Invopak will not be charging PPT on pallet wrap or straps. Transport packaging does not count towards the 10 tonne threshold for registration. For a full list of Transport exemptions please click the link below:

HMRC Transport Packaging Exemptions

How do I claim back PPT on exported products?

In order to claim a credit from HMRC you must keep records to show the weight of the packaging and the date it was exported, to prove it has been exported within the necessary 12 month timeframe. For a full list of appropriate documentation for HMRC purposes please click the link below:

HMRC Record Keeping and Accounts Guidance

How does it affect VAT?

PPT must be included for VAT purposes, so VAT is charged on the product cost and PPT.

Are any plastic products exempt?

Certain products will be exempt, including products used for packaging licensed medicine. Other products will be exempt from the charge but may still count towards the 10 tonne threshold for registration.