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Blog: Plastic packaging tax comes into force this April

From 1 April 2022 a new ‘Plastic Packaging Tax’ will be introduced, designed to encourage the use of recycled plastics.

Affected businesses must register for Plastic Packaging Tax if they’ve manufactured or imported 10 or more tonnes of plastic packaging within the last 12 months, or plan to do so in the next 30 days. This includes non-resident taxpayers who import finished plastic packaging into the UK on their own behalf, or manufacture finished plastic packaging in the UK.

Where the tax applies, it is charged at £200 per metric tonne of packaging. It only applies to manufacturers and importers of plastic packaging components which contain less than 30% recycled plastic.

What is considered plastic?

HMRC guidance states: ‘For the purposes of plastic packaging tax, plastic means a polymer material to which additives or substances may have been added. Cellulose-based polymers that have not been chemically modified, such as viscose, will not be treated as plastic for the purpose of plastic packaging tax. Other cellulose-based materials which are chemically modified, such as cellulose acetate, will be considered plastic.’

Working with partners

  • If you’re a partnership or other unincorporated body

You must register if at least one partner (or person carrying out business) has manufactured or imported 10 or more tonnes of finished plastic packaging components within the last 12 months, or will do so in the next 30 days.

All members will then be joint and severally liable for Plastic Packaging Tax.

  • If you’re a member of a business group

You can register as a group. This allows for only one of the businesses to complete returns and make payments on behalf of all members of the group.

Registration tests

There are 2 tests to check if you need to register. You must look back over the last 12 months and look forward to the next 30 days.

If you meet either of these tests, you must register for the tax.

Find examples of applying these tests.

You must include certain exempt packaging when working out if you’ve reached the 10 tonne threshold. Find out more about exempt packaging which counts towards the 10 tonne threshold for registration.

  • Look back over the last 12 months

You must register if you’ve manufactured or imported 10 tonnes or more of finished plastic packaging in the last 12 months.

You should check how much-finished plastic packaging you manufactured and imported each month, over the last 12 months. If you meet the 10 tonne threshold, you will be liable from the first day of the month.

You will have 30 days to register from the date you met or exceeded the threshold.

As the tax starts on 1 April 2022, this test works differently between 1 April 2022 and 30 March 2023. You only need to look back to 1 April 2022.

  • Look forward to the next 30 days

You must register if you will manufacture or import 10 tonnes or more of finished plastic packaging within the next 30 days. This test can be applied at any time.

If you expect to meet or exceed the 10 tonne threshold, you will be liable from the date you had reason to expect you would reach the threshold.

You will have 30 days to register from the date you met or exceeded the threshold.

How to record your results of the tests

If you meet either of the tests and need to register, you should keep a record of how you worked this out and evidence proving your outcome.

If you do not meet either of the tests and are not required to register, you should keep records demonstrating that you manufacture or import less than 10 tonnes per year of finished plastic packaging, including filled packaging.

Find out more about keeping records and accounts or speak to our tax team for further advice.

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