New Plastic Packaging Tax for UK Businesses


From 1st April 2022 HMRC are introducing a new Plastic Packaging Tax to encourage businesses to use recycled plastics in their packaging. The rate of the tax will be £200 per metric tonne of plastic packaging.

The new tax will apply to plastic packaging that is less than 30% recycled that is:

  • manufactured in the UK;
  • imported into the UK as packaging only;
  • imported into the UK as filled packaging such as bottles filled with liquid (the tax will only apply to the plastic packaging itself and not to the goods that it contains).

Any business that manufactures or imports 10 or more tonnes of plastic packaging in a 12 month period will be required to register for the tax. Businesses manufacturing or importing under this volume will still need to keep records to demonstrate that it is below the tax threshold (and monitor in case the business becomes liable in the future).

Businesses should consider making changes to the packaging it manufactures or imports so that it includes at least 30% recycled plastic where possible. This would mean that no tax would be payable under these circumstances. Plastic packaging is assumed to not meet the recycled content test unless it can be shown that it does.

Actions to take:

  • Maintain records of the packaging the business manufactures or imports, even if this is less than the 10 tonnes a year threshold of the tax
  • Ensure that records held show the relevant information needed to establish how much tax will be payable, or to confirm that nothing is due
  • Provide customers with more information about the types and quantities of material being supplied
  • Consider whether more recycled plastic could be used to reduce the packaging subject to the tax
  • Consider whether to bear the tax cost in the business or pass it on to customers.
  • Consider supply chains where the impact of the tax can be mitigated
  • Upskill appropriate staff
  • Register for the online service which will become available 1st April 2022
  • Invoices will be required to include a statement that the tax has been paid, however this is not mandatory from 1st April 2022 and will instead come in at a later date

It is expected that the Plastic Packaging Tax will affect a wide range of businesses, and as a new tax, subject to many conditions, regulations, exceptions and anomalies, will undoubtedly bring many challenges as well as opportunities. 

Please contact the Indirect Tax team at Armstrong Watson if your business will be affected and you would like assistance.

Contact the Indirect Tax team