Plastic Packaging Tax (PPT) Guide

(PLEASE NOTE: THIS GUIDE IS FOR BPF MEMBERS ONLY)

 

About the Guide:

• The guide which is exclusively available for members of the BPF provides an overview of the new Plastic Packaging Tax (‘PPT’) that has been implemented in the UK from 1 April 2022
• The guide is subject to change as new guidance and regulations are released in the lead up to 1 April 2022
• Consultations are still ongoing, and there are a number of areas, particularly on what is meant by ‘plastic’ and ‘recycled plastic’ and which products are in/out of scope, that are yet to be clarified
• PPT is expected to be introduced in Spain and Italy in 2023. Broader discussions are also happening across the EU in countries such as the Netherlands, Germany and France, Sweden and Belgium
• Primary UK legislation is contained in Part 2 of Finance Act 2021
• Draft secondary UK legislation is conta ined in The Plastic Packaging Tax (General) Regulations 2022
• Government guidance can be found here
• The aim of the tax is to provide an incentive for businesses to use recycled plastic and to increase the general levels of recycling to support the  environment

Contents:

Who needs this guide?

• Who needs to read this guide?
• Who accounts for the PPT

When does the tax apply?

• What constitutes ‘plastic packaging’? — plastic
• What constitutes ‘plastic packaging’? — packaging
• What constitutes ‘finished’?
• What constitutes ‘taxable’?

What are the reliefs?

• Use of recycled plastic
• Exported packaging
• Immediate packaging of medicinal products
• Other reliefs — not reportable
• Summary of reliefs and obligations

Compliance

• Who registers and when?
• Registration process and groups
• When is PPT accounted for (tax points)?
• Preparing and submitting PPT returns

Calculating the tax amount

• Calculating the weight
• Waste material
• Calculating the tax amount and tax credits

What records or evidence are needed?

• What records should businesses keep?
• What evidence should businesses keep?
• What are the IT capabilities needed?

What are the consequences?

• Accounting for PPT Secondary/Joint and several liability
• Penalties
• HMRC powers and audits

Decision tree for guidance

• Check if your plastic packaging is taxable
• Check if you need to register for PPT

Key Facts about the Plastic Packaging Tax

• PPT came into effect on 1 April 2022. Registration thresholds and liability calculations run from this date. 
• Applies when plastic packaging is manufactured in the UK, imported into the UK, or when a business is held secondarily liable to pay. 
• There are a number of examples where plastic packaging is exempt or outside the scope, including where 30% or more of the plastic is recycled.
• The value of the tax is currently £210.82 per metric tonne (may increase subject to government guidance).
• Records and evidence are required whether registered or not.
• Changes to IT systems may be needed for tax identification, calculation, reports and potentially new PPT invoicing requirements.
   

More information from the BPF on the PPT can be found HERE