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UK Plastic Packaging Tax - What Does My Business Need To Know?

Rows of plastic bottles

As of 1st April 2022, the UK Government brought in a new tax aimed at incentivising businesses to use recycled materials in the production of plastic packaging.

If your business manufactures or imports packaging with less than 30% recycled plastic, you will be required to pay tax at the rate of £200/tonne.

Even if your business does meet the 30% threshold, you will still need to be registered for the tax, even if you do not have to pay.

Let’s take a look at this in some more detail.

Does my business need to register for plastic packaging tax?

Your business will need to register for the tax if it has manufactured or imported more than 10 tonnes of finished plastic packaging components within the last 12 months, or you are planning to in the next 30 days.

Even if your business does need to register for the tax, you might not have to pay it. This is where the 30% threshold comes in. Although, as a part of this, you will have to keep accurate records and be able to provide evidence. It will be assumed that the plastic isn’t recycled until you are able to prove that it is.

Does this cover all types of plastic?

Based on guidance from the website, plastic is a polymer material to which additives or substances may have been added.

If your business uses cellulose-based materials that have not been chemically modified (e.g. viscose), they will not be treated as plastic for the purposes of the tax.

However, if you are using a cellulose-based material that has been chemically modified (e.g. cellulose acetate), then this will be considered as plastic.

Any additives such as calcium or dyes are counted as part of the plastic.

You will need to account for tax on each packaging component if it is made up of different components. For example, you might have a clear plastic bottle and a white bottle cap, these would need to be accounted for separately.

Is there a specific way needed to weigh the components?

A pile of plastic bottle caps

The tax will be based on the weight of the components in kilograms. You will also need to know the percentage of recycled plastic content.

Once you know these weights, you will be able to know whether you need to register for the tax and how much you will need to pay.

There are 5 different methods you can use to work out the weights:

  1. Weigh each individual item
  2. Using a sample - you weigh one item and use that to calculate the weight for the rest
  3. Material inputs - when manufacturing identical products, you can divide the net weight by the number of components
  4. Verified specification - using the weights given on the product specification
  5. Bulk weighing - divide the total weight by the number of components produced

How can my business register for the tax?

If you’ve worked out that you will need to register to pay the tax, you will need to go to the website and fill in the form.

To do this you will need your:

  • Business type
  • Business address and contact details
  • Date your business needed to start paying the tax
  • Estimate of how much plastic packaging you expect to manufacture or import in the next 12 months
  • Customer Reference Number

Doing your part

While this may seem like extra work for you and your business, remember that this is to help pave the way toward a greener future.

This Earth Day, consider the things you can do through your business to help ‘Restore our Earth’.

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