Plastic packaging tax legislation was introduced to the UK in April 2022. Its purpose is to push businesses towards using more recycled materials. If you’re a business that uses plastic packaging then you may simply be filing returns for plastic packaging tax and thinking no more about it. However, by understanding it fully, you can discover where savings can be made, or even rethink your packaging and supply chains to avoid it altogether.
This guide explains the UK plastic packaging tax rules and regulations, and offers advice on reducing packaging bills for good.
Key takeaways:
- Plastic packaging tax is a tax that businesses must pay if they import or manufacture more than 10 metric tonnes of plastic packaging per year.
- If the plastic packaging contains 30% recycled materials or more, businesses do not have to pay tax.
- Every business using over 10 tonnes of plastic packaging must register for the tax, regardless of the recycled content
- The current plastic packaging tax rate is £228.82 per tonne
- Certain items, such as medical packaging, are exempt
- Companies should reduce their packaging, design recycled packaging and keep accurate records to remain compliant with plastic packaging tax legislation
Contents:
- What is plastic packaging tax?
- How much is plastic packaging tax?
- What is included?
- What is exempt?
- Who pays plastic packaging tax?
- Why was plastic packaging tax introduced?
- How to reduce plastic packaging tax
- How do you stay compliant with plastic packaging tax?
What is Plastic Packaging Tax (PPT)?
Plastic packaging tax is a specific type of tax payable by UK businesses who manufacture or import plastic packaging. It applies where plastic is the main material by weight.
If you make or import 10 or more metric tonnes of plastic packaging in a year, you must register with HMRC. Plastic packaging tax often catches companies off guard as many believe that if you are an importer you are not liable. This is incorrect and you need to ensure you have completed the plastic packaging tax registration.
There are some other key points to remember:
The 30% Threshold
If your plastic packaging contains at least 30% recycled plastic, it will not be taxed. For any packaging that falls below that threshold – even marginally – the full tax rate will apply. Organisations must prove the content of their plastic packaging contains 30% recycled components to avoid the tax.
This is important information as it incentivises businesses to use more recycled plastics or alternative packaging. Packaging becomes both a financial decision and an environmental one.
Plastic Packaging Tax Registration
The 30% threshold can trick companies into thinking they do not have to register for plastic packaging tax if their packaging is 100% recycled. This is not the case. The 30% threshold only applies to actually paying the tax. Registration is based on volume, not recyclability. If you make or import 10 tonnes of plastic packaging, no matter how much of it is recycled, you must register with HMRC.
How Much is Plastic Packaging Tax?
From the 1st April 2026, the plastic packaging tax rate is £228.82 per tonne.
If you use plastic packaging with more than 30% recycled materials you will not pay any tax. Even if your packaging has 28% recycled content, you must pay the full £228.82 per tonne.
Plastic Packaging Tax Calculator
Let’s say you are a business importing 5 tonnes of plastic packaging per year with a recycled content of 10%.
5 x £228.82 = £1144.1
That can quickly add up and increase your packaging budget considerably.
Some items, however, will not be included in this calculation and do not contribute to the 10 tonne rule. To effectively calculate your plastic tax bill you need to know:
- How many tonnes of plastic packaging do you make or import?
- How much of it is recycled content – is it more than 30%?
- Is any of it liable for a plastic packaging tax exemption?
What is Included?
Knowing the type of packaging you must pay tax on avoids the risk of overpaying or of being fined for non-compliance with plastic packaging tax guidance.
The two main types of packaging included are:
- Consumer-facing packaging – Items that reach the end user with a product, for example, food cartons
- Transit packaging – Used to protect goods in transit, such as pallet wrap
What is Exempt?
The following are covered under plastic packaging tax exemption rules:
- Medical and pharmaceutical packaging – Specially regulated medicinal packaging is exempt, including plastic medicine bottles
- Long-term reusable storage items – Items like toolboxes used to store goods permanently and not used for packaging
- Packaging for national security purposes – Anything used to protect sensitive electronics, weapons and classified documents, such as barrier bags, will not be taxed.
Multi Material Packaging
Multi material packaging is any packaging that contains two or more types of materials. If plastic is the main material by weight, it’s treated as plastic packaging and taxed – it does not matter if there are other components used.
It can be harder to classify the weight according to the 30% threshold with multi material packaging. Businesses should request material data sheets from suppliers to make accurate assessments.
Who Pays Plastic Packaging Tax?
The organisation that makes or imports the packaging is liable for the plastic packaging tax.
Plastic packaging tax guidance identifies the manufacturer as the business that carries out the “last substantial modification” to the packaging.
The importer is defined as the business that imports finished plastic packaging components into the UK on their own behalf. It covers unfilled and filled packaging.
Managing Plastic Packaging Tax for Importers
If you are an importer, there can be some additional challenges when navigating plastic packaging tax rates. Not only must they pay the tax but also handle the administration involved in tracking recycled content across borders and international supply chains. In addition, supplier claims around recycled content need to be verified to avoid non-compliance.
To help alleviate this burden, importers are advised to:
- Request third-party certification from suppliers
- Conduct supplier audits
- Include liability clauses in contracts for incorrect declarations
Why Was Plastic Packaging Tax Introduced?
Plastic packaging tax legislation is a response to harmful levels of plastic waste, poor recycling infrastructure and pressure on the UK government to do more for the environment.
The aim is to change behaviour for UK businesses. If new plastic is far more costly than recycled plastic packaging, companies are more likely to find eco-friendly alternatives, such as paper or cardboard. The government is committed to eliminating all avoidable plastic waste by 2042. Incentivising large organisations to find other easy for packaging their goods is one step towards reaching this target.
How to Reduce Plastic Packaging Tax
To significantly lower your plastic packaging tax rate, or eliminate the fee altogether, the best approach is to make smarter packaging decisions. This will also lower costs, improve sustainability and help achieve environmental targets. As recycling and waste experts we would suggest focussing on a few key areas:
- Reduce packaging volume – Remove unnecessary materials and explore lightweight alternatives
- Improve recyclability – Prioritise monomaterials, avoid complex composites that are harder to recycle, and design packaging with UK recycling systems in mind
- Increase recycled content – Switch to packaging that exceeds the 30% threshold
- Improve data accuracy – Be thorough with supply chain documentation and ensure reporting is precise to avoid overpaying or triggering penalties
- Partner with a waste specialist – Strengthen compliance, improve recycling outcomes and reduce long-term costs across your operations
How Do You Stay Compliant With Plastic Packaging Tax?
To stay compliant, businesses need to do more than file their tax returns. You need to be able to prove that the content of your packaging contains more than 30% recycled materials to avoid plastic packaging tax. HMRC expects clear, traceable evidence showing where recycled material comes from and how it’s processed. If your claims won’t hold up under scrutiny, you could end up being fined.
Plastic Recycling from Fresh Start
The businesses that gain the edge are not the ones prioritising compliance, they’re the ones proactively designing packaging with recycled content from the outset, working closely with suppliers to verify materials and using real-world data to inform business decisions.
At Fresh Start, we focus on helping clients to reduce their plastic waste in the first instance. Using less is the ultimate goal closely followed by increasing recycling rates. We regularly review your account and provide detailed reports on how much of your waste has been effectively recycled, giving you the data you need to see where improvements can be made. We also offer a completely free audit of your site, and make recommendations for minimising waste outputs across all waste streams.
Achieving compliance and making your business more planet friendly requires a multi-pronged approach, and we’re confident we’re the waste management provider for the job.
