Business tax Tax

Plastic Packaging Tax (PPT) update - August 2024

What insights can we gain from the most recent Plastic Packaging Tax (PPT) statistics released by HMRC

22 Aug 2024
  • Jayne Harrold
  • Hugh Doherty
2 authors
Authors
Plastic Packaging Tax Article 1920X1080 Dec 21

HMRC published the latest statistics on Plastic Packaging Tax on 15 August 2024 [1].

When the PPT was first introduced in April 2022, the UK Government expected to generate £235 million in the first year from an estimated 20,000 manufacturers and importers.

Interestingly, registrations in year one were significantly below the expected 20,000, but tax receipts were £50 million higher than expected at £285 million. In part this was because a large number of businesses were not claiming their recycled content due to concerns about whether the evidence they held would be sufficient.

Registrations for Plastic Packaging Tax

In 2023/24, year 2 of PPT, registrations have increased to 4,669, still significantly below original expectations, and tax receipts are down to £268 million. If the tax works as expected then tax receipts should decrease over time as taxpayers adopt the desired behaviour changes of increasing their recycled content and reducing the amount of plastic packaging they produce or import.

More surprising, in 2023/24 only 42% of plastic packaging declared was taxed.  Of the remaining 58%:

  • 46% contained at least 30% recycled plastic
  • 11% was exported, intended for export or converted
  • Less than 1% was used for the immediate packaging of licensed human medicines

Gaps between the cracks of reported plastic packaging

Some packaging will not have been reported at all, namely packaging that benefits from the exclusions or exemptions, because it is:

  • Set aside for non-packaging use (e.g. silage wrap)
  • Tertiary packaging on imported goods (e.g. shrink-wrap and straps)
  • Reusable packaging which is primarily used for display of products (e.g. shop fittings)
  • Integral to the use of the product (e.g. teabags)
  • Used for long term storage of goods by consumers (e.g. glasses cases)

HMRC have begun the process of auditing compliance with PPT. Questions are being asked about evidence to support claims of recycled content and the basis for excluding some items from the return.

If you need help assessing your compliance status or dealing with an HMRC enquiry, please get in contact with our environmental tax and PPT experts.

Sources

Sources
1 - Plastic Packaging Tax (PPT) statistics commentary - GOV.UK (www.gov.uk)

Approval code: NTEH70824123

By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. This briefing does not constitute advice nor a recommendation relating to the acquisition or disposal of investments. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Details correct at time of writing.

Tax legislation

Tax legislation is that prevailing at the time, is subject to change without notice and depends on individual circumstances. You should always seek appropriate tax advice before making decisions. HMRC Tax Year 2024/25.