UK Plastic Packaging Tax 2026/27: What Businesses Need to Know
Plastic Packaging Tax at £217.85 per tonne in 2026/27 -- who must register, the 30% recycled content threshold, exemptions, record-keeping requirements, and HMRC enforcement.
What is Plastic Packaging Tax?
Plastic Packaging Tax (PPT) is a UK environmental tax introduced on 1 April 2022. It applies to plastic packaging manufactured in or imported into the UK that does not contain at least 30% recycled plastic content. The tax is designed to provide a financial incentive for businesses to use recycled plastic in packaging, stimulating demand for the recycled plastics market and reducing the UK's reliance on virgin plastic.
PPT is charged at £217.85 per tonne in 2026/27. The rate is adjusted annually in line with Consumer Prices Index (CPI) inflation.
Unlike some environmental taxes, PPT applies throughout the supply chain. The primary liability falls on manufacturers and importers, but the cost is typically passed downstream through supply chains, ultimately affecting the price of packaged goods.
What counts as plastic packaging?
Plastic packaging is packaging that is predominantly plastic by weight -- meaning it is made of more than 50% plastic. This includes:
- Plastic bottles, tubs, trays, and bags.
- Plastic film used to wrap products.
- Multi-material packaging where the plastic component exceeds 50% by weight.
- Plastic components of packaging (e.g. a plastic lid on a cardboard box).
Each distinct packaging component is assessed separately. A plastic bottle and its plastic cap are two separate components. The cardboard label on the bottle is not plastic packaging.
Plastic packaging does not include:
- Packaging that is more than 50% non-plastic material (e.g. a cardboard box with a small plastic window).
- Packaging manufactured and exported without ever being used in the UK.
- Plastic that is not packaging (e.g. plastic storage bins, product housings, furniture).
The 30% recycled content threshold
Plastic packaging that contains at least 30% recycled plastic by weight is exempt from the tax. The recycled content is measured across the entire packaging component, including all materials used.
"Recycled plastic" means plastic that has been reprocessed from recovered material and is no longer suitable for its original use. It must be post-consumer or pre-consumer (industrial) waste that has been genuinely recycled -- not merely reused or reprocessed virgin plastic.
Evidence requirements for recycled content
You must be able to demonstrate recycled content claims. HMRC expects:
- Certificates or statements from your plastic resin or packaging suppliers confirming the recycled content percentage.
- Internal quality records or audit trails.
- Third-party verification (e.g. ISO 15343 or similar standards) where available.
Simply asserting that packaging contains 30% recycled content without evidence is not sufficient. HMRC can challenge claims and disallow the exemption.
Who must register
The 10-tonne threshold
You must register for PPT if you manufacture or import 10 or more tonnes of plastic packaging components in a 12-month rolling period. There is no small-business exemption from registration -- the threshold is the same for all businesses.
You must register within 30 days of the end of the period in which you crossed the 10-tonne threshold. Late registration attracts penalties.
Crucially, you must register even if all your packaging meets the 30% recycled content threshold and no tax is actually due. Registration and liability to pay the tax are separate obligations.
Who manufactures?
A UK manufacturer is the last person to perform a substantial manufacturing process on the plastic packaging before it is used. If you buy plastic pellets and form them into packaging, you are the manufacturer. If you print on pre-formed packaging, you are not the manufacturer -- the company that formed the packaging is.
Who imports?
If you import packaged goods, the plastic packaging around those goods is imported packaging and you are the importer liable for PPT. This catches UK businesses importing goods from overseas in plastic packaging -- the tax is on the packaging, not the goods inside.
Worked example: calculating PPT liability
A soft drink company manufacturers 500 tonnes of plastic bottles per year in the UK. Of these:
- 350 tonnes contain 35% recycled PET content (above the 30% threshold) -- exempt from PPT.
- 150 tonnes contain 15% recycled content (below the threshold) -- subject to PPT.
PPT calculation:
- Taxable tonnage: 150 tonnes
- PPT rate 2026/27: £217.85 per tonne
- Annual PPT liability: 150 x £217.85 = £32,677.50
The company would also need to register, file quarterly returns, and maintain records for all 500 tonnes (both exempt and taxable).
Exemptions from PPT
Beyond the recycled content exemption, there are specific categories of plastic packaging that are exempt from PPT even if they contain less than 30% recycled content:
Packaging for medicinal products
Plastic packaging that is used to contain a licensed medicinal product under the Medicines Act 1968 or Human Medicines Regulations 2012 is exempt. This covers prescription medicines, over-the-counter medicines, and medical devices.
Transport packaging on imported goods
Primary packaging (the packaging the consumer sees) on imported goods is subject to PPT. But certain transit/transport packaging used solely for protecting goods during transport -- such as plastic stretch wrap applied to a pallet outside the UK and not intended to reach the consumer -- may be exempt.
Set-aside packaging
Packaging that has been manufactured or imported but is intended to be exported immediately without being used in the UK is not subject to PPT.
Less than 30% plastic by weight
As noted above, if the packaging component is more than 50% non-plastic by weight, it is not plastic packaging and PPT does not apply.
Filing and payment
PPT is reported on a quarterly basis. Returns and payments are due one month and one day after the end of each quarter. For example, for the quarter ending 31 March, the return and payment are due by 30 April.
Payments are made electronically. HMRC will issue a payment reference when you register.
Record-keeping requirements
You must keep records for at least 7 years. Required records include:
- Weight of plastic packaging manufactured or imported.
- Evidence of recycled content for all exempt packaging.
- Description of each type of packaging component.
- Quantity of packaging manufactured, exported, or used in the UK.
- Credit records (e.g. where PPT was already paid upstream).
- Annual accounting adjustments.
Records can be electronic or paper. HMRC has the power to inspect premises and request documents during compliance checks.
Credits and the supply chain
Credit for exported packaging
If you have paid PPT on plastic packaging and then export the packaging (or the packaged goods) from the UK, you can claim a credit to offset against future PPT liabilities. You cannot receive a cash repayment of PPT -- it can only be credited against future liability.
Secondary liability
Where PPT has not been paid and packaging passes through several hands, HMRC can in certain circumstances raise the PPT liability on a downstream business in the supply chain if the upstream party has defaulted. This creates an incentive for buyers to obtain evidence that PPT has been paid upstream.
HMRC enforcement approach
HMRC has stated that PPT compliance is a priority area. Enforcement activities include:
- Risk-based compliance checks: HMRC uses data from other tax returns, customs declarations (for importers), and industry intelligence to identify businesses that may have crossed the threshold but have not registered.
- Penalties for late registration: up to 100% of the tax due.
- Penalties for inaccurate returns: from 30% (careless) to 100% (deliberate) of the tax understated.
- Penalties for failure to keep records: up to £500 per failure.
HMRC has indicated it will use powers to inspect business premises and request information from third parties (including suppliers and customers) where evasion is suspected.
Interaction with other packaging regulations
PPT operates alongside the UK's wider packaging regulations:
- Extended Producer Responsibility (EPR) for packaging -- a separate regime requiring producers and importers above certain thresholds to pay fees based on the amount of packaging placed on the market, which took effect from 2024/25.
- Packaging (Essential Requirements) Regulations -- restricting what packaging can be placed on the market at all.
- OPRL (On-Pack Recycling Label) -- a voluntary scheme to indicate to consumers whether packaging is widely recycled.
PPT sits alongside these but is separate. A packaging item may attract PPT even if it is technically recyclable.
Sources
Frequently asked questions
What is the Plastic Packaging Tax rate for 2026/27?
The rate is £217.85 per tonne of plastic packaging that does not contain at least 30% recycled plastic content. The rate is reviewed annually and increased in line with CPI inflation.
Who needs to register for Plastic Packaging Tax?
You must register if you manufacture or import 10 or more tonnes of plastic packaging in a 12-month period. You must register within 30 days of reaching the 10-tonne threshold, even if all your packaging meets the 30% recycled content threshold and no tax is due.
What records do I need to keep for Plastic Packaging Tax?
You must keep records for at least 7 years showing: the weight of plastic packaging manufactured or imported, the recycled plastic content (with supporting evidence from suppliers), any exemptions claimed, and your tax calculations. HMRC can inspect these records during compliance checks.
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