The UK’s Plastic Packaging Tax (PPT) became effective on the 1st of April 2022 and applies to plastic packaging in the UK that contains less than 30% recycled plastic content at a rate of £200 per metric tonne. 

The tax aims to:

• encourage the use of more sustainable plastic packaging
• increase the use of recycled plastic
• help reduce plastic waste

The PPT has been promoted by the UK government as a world leading measure and other jurisdictions are putting in place similar regimes to combat plastic waste worldwide. We expect plastics regulation to continue growing globally in the coming years given the current focus on sustainability.

The Uk's PPT is payable by manufacturers and importers of plastic packaging that are liable to register with HMRC either as a result of:

• having grounds to believe that they will manufacture or import 10 or more tonnes of plastic packaging within a 30 day window
• manufacturing or importing 10 or more tonnes of plastic packaging within the last 12 months.

Importers have to take into account both finished plastic packaging that they import as well as filled plastic packaging that already contains goods (e.g. filled plastic drinks bottles).

As we've mentioned before, a crucial aspect of the PPT is to downstream businesses that buy plastic packaging on which the tax should have already been paid may be found jointly and severally liable for any unpaid tax. In late December 2021, HMRC published guidance on the due diligence businesses should conduct in relation to the PPT.

The guidance does not specifically set out a list of checks that should be carried out in every case. Rather, it is the responsibility of each business to decide which checks are relevant and proportionate to the businesses’ circumstances and supply chain.

Businesses that have not done so yet, should assess whether they are required to register and pay for the PPT. Even businesses that are not required to pay the PPT directly, because of the secondary liability risk, should consider what steps to take to ensure that it is not involved in a supply chain where the PPT goes unpaid.