Plastic Packaging Tax (PPT) Services | Smart Comply – Your Guide to Compliance

Discover how Smart Comply can assist your business with Plastic Packaging Tax (PPT) compliance.

From registration to cost calculation, we help you navigate the complexities, ensuring sustainable practices and cost-effective solutions. Contact us today for expert guidance.

 

In an effort to promote the integration of recycled content into plastic packaging, the Plastic Packaging Tax (PPT) was introduced. This tax serves as a compelling economic incentive for businesses to incorporate recycled materials in plastic packaging production, thereby increasing demand for recycled materials and encouraging higher levels of recycling, diverting it away from landfill or incineration.

As the designated tax authority, HMRC oversees the collection and management of the Plastic Packaging Tax. If your business has manufactured or imported 10 or more tonnes of plastic packaging in the last 12 months, or you anticipate exceeding this threshold in the next 30 days, registration for the tax is necessary. Smart Comply is here to assist you in determining your registration status, calculating costs, and preparing your data for submission to HMRC.

You must register with HMRC for the Plastic Packaging Tax if you:

  • Expect to import into the UK or manufacture in the UK 10 tonnes or more of finished plastic packaging components in the next 30 days
  • Have imported into the UK or manufactured in the UK 10 tonnes or more of finished plastic packaging components in the last 12 months

You will have Plastic Packaging Tax costs if you have manufactured or imported plastic packaging components which contain less than 30% recycled plastic.

Packaging should only contain recycled plastic where it is permitted under other regulations and food safety standards.

The tax came into force on 1 April 2022 and is charged at a rate of:

Ensure compliance with plastic packaging tax regulations by understanding that the tax is applied on a per-component basis. For example, when assessing a plastic soft drink bottle, consider its individual components such as the bottle, cap, and label. If the packaging comprises of multiple

materials, it will be categorized as plastic packaging if the predominant weight is plastic. Stay informed and adhere to these guidelines to navigate the plastic packaging tax effectively.

Exported primary and secondary packaging can be relieved but must be sufficiently evidenced for auditing purposes. Imported transport/tertiary packaging is exempt, for example transit/pallet wrap which helps to contain multiple items in transit.

This tax has quarterly reporting periods. Records must be kept including the amount of plastic packaging manufactured or imported, the amount of each component that contains at least 30% recycled content along with evidence, the amount that is exempt from the tax and the amount that is exported for tax relief purposes. You will also need to record the date the packaging was manufactured, imported, or exported.

Liable packaging will be taxed at the applicable rate, as set by HMRC, unless your business can
sufficiently evidence that the packaging in question contains sufficient recycled content. You must have auditable due diligence processes in place to ensure any recycled content and/or exported tonnages you may declare can be inspected by HMRC upon request.

 

Discover how Smart Comply can enhance your business’s PPT processes:

  1. Determine tax liability: Gain clarity on your tax liability status.
  2. Comprehensive plastic packaging data: Efficiently collect detailed data on plastic packaging items and components, with seamless collaboration with your suppliers.
  3. Data validation: Ensure the accuracy of populated data through thorough sense checks.
  4. Cost calculation and budget assistance: Receive support in calculating costs so your business can budget effectively.
  5. Enhance data collection and storage: Identify and implement improvements in your data collection and storage practices.
  6. Liability reduction strategies: Investigate potential areas for reducing liability by evaluating your current plastic packaging usage. Optimize your PPT workflow with Smart Comply’s tailored solutions for sustainable business growth.

Contact Smart Comply:

Contact us at 03333442390 or hello@smartcomply.co.uk to assess your business’s need for
Plastic Packaging Tax registration and discover how we can streamline your compliance process.
Alternatively, click here to fill out our contact form.

Up to date PPT guidance can be found here

Frequently Asked Questions  

Who pays the Plastic Packaging Tax?

UK registered businesses who are liable under the plastic packaging tax must pay their own tax directly to HMRC. It is up to businesses if they wish to pass costs on through the supply chain by increasing the cost of their goods.
To register your business for plastic packaging tax and to submit your returns, you’ll need the Government Gateway user ID and password for your business.

All my packaging is fully recyclable – does that mean I am exempt?

It does not matter whether your packaging is recyclable – the tax is on plastic packaging that does not contain at least 30% recycled plastic.

What packaging do I need to include towards the 10 tonnes threshold?

The only packaging you do not count towards the 10 tonnes threshold when working out if you need to register for the tax or not is: transport packaging used to import goods into the UK; packaging used in aircraft, ship, and rail goods stores; packaging that’s integral to the product; packaging where the packaging function is secondary to the storage function; and packaging designed primarily to be reused for the presentation of goods.

Who qualifies for tax exemption?

There are four specific categories of packaging that are exempt from the tax. These include items:

  • Utilized for the immediate packaging of licensed human medicine.
  • Permanently designated for non-packaging purposes.
  • Employed as transport packaging for the secure importation of multiple goods into the UK.
  • Utilized in aircraft, ship, and rail goods stores.
What do you mean by multiple material packaging?

A packaging component that is made of multiple materials but contains more plastic by weight than any other single substance will be a plastic packaging component for the purposes of the tax. For example, if a 10 gram packaging component is made of 4 grams of plastic, 3 grams of aluminium and 3 grams of cardboard, all 10 grams will be considered plastic packaging for the purposes of this tax.
Likewise, if the 10 gram packaging component was 3 grams of plastic, 4 grams of aluminium and 3 grams of cardboard, none of the item would be taxable. If the weight of plastic in the component is equal to the weight of another single material used, the component would not be considered as plastic for the tax.

What do you mean by a component?

Packaging can be made up of several packaging components and are generally manufactured separately before being assembled into a packaging unit. Each component would be subject to the tax. As an example, a soft drink bottle is made up of 3 components, the bottle, the lid, and the label.
Each component will need to include at least 30% recycled plastic for no tax to be charged. Another example is cardboard packaging with a plastic window. The plastic window is a component in its own right and tax is charged on it. The cardboard box is a separate component and not taxed.

How do I avoid the plastic packaging tax?

An easy way to avoid being liable for the plastic packaging tax is to ensure all packaging you manufacture and/or import is made of more than 30% recycled plastic. The tax aims to increase the amount of recycled packaging used by organisations in the UK, so changing your packaging supplier or manufacturing process is a good place to start.
You can also avoid the plastic packaging tax by reducing how much you manufacture or import to less than 10 tonnes of plastic packaging per year.