What Plastic Packaging Tax is
Plastic Packaging Tax (PPT) has applied since 1 April 2022 to plastic packaging components manufactured in, or imported into, the UK that contain less than 30% recycled plastic. It is paid by the UK manufacturer or importer, not by the retailer or the end user, and it is charged per tonne of packaging. The aim is to make recycled plastic the cheaper option.
The rate has risen each April:
| Packaging manufactured or imported | Rate per tonne |
|---|---|
| From 1 April 2022 | £200.00 |
| From 1 April 2023 | £210.82 |
| From 1 April 2024 | £217.85 |
| From 1 April 2025 | £223.69 |
| From 1 April 2026 | £228.82 |
| From 1 April 2027 (announced) | £236.56 |
At the 2026/27 rate the tax works out at about 22.9p per kilogram. Budget 2026 announced the April 2027 increase in line with CPI, to be legislated in Finance Bill 2026-27.
Who must register
You must register with HMRC if you have manufactured or imported 10 tonnes or more of finished plastic packaging components in the last 12 months, or expect to in the next 30 days. There are two tests:
- Look-back test. At the end of each month, add up the last 12 months. If you reach 10 tonnes you are liable from the first day of the following month;
- Forward-look test. If at any time you expect to reach 10 tonnes in the next 30 days, you are liable from the date you had reason to expect it;
- Deadline. Register within 30 days of becoming liable. Tax is due on all chargeable packaging from the liability date, including your normal production.
The threshold counts packaging that is not taxed, including components with 30% or more recycled plastic, immediate packaging for licensed human medicines and packaging permanently set aside for non-packaging use. Below 10 tonnes there is no tax to pay, which is why this calculator shows nil for small businesses.
The 30% recycled plastic test
The test is applied to each packaging component, not to your business as a whole. Divide the weight of recycled plastic in the component by the total weight of plastic in it. HMRC's example: a component with 2g of recycled plastic, 2g of virgin plastic, 3g of aluminium and 3g of card is 50% recycled (2 ÷ 4), so no tax is due.
When the test is failed, tax is charged on the whole component, not just the plastic. A 10g carton containing 1g of recycled and 4g of virgin plastic (20% recycled), plus aluminium and card, is taxed on all 10g. A component only counts as plastic if plastic is its heaviest material by weight, so a carton of 2g plastic, 5g aluminium and 3g card is outside the tax altogether.
Because the test is per component, an average recycled content across a product range can mislead. Enter each group of components with the same recycled content as a separate line in the calculator.
Worked example
A food manufacturer imports 40 tonnes of virgin plastic trays and 15 tonnes of film with 35% recycled content over a year.
- Threshold. 40 + 15 = 55 tonnes, well over 10 tonnes, so the business must register;
- Trays. 0% recycled, so all 40 tonnes are chargeable: 40 × £228.82 = £9,152.80;
- Film. 35% recycled, so it is not chargeable but still counts towards the threshold;
- Plastic Packaging Tax for the year. £9,152.80, paid over four quarterly returns.
Switching the trays to 30% recycled content would remove the charge entirely.
Exemptions and credits
Four categories of packaging are exempt: immediate packaging for licensed human medicines, packaging permanently recorded as set aside for non-packaging use, transport packaging used to import goods into the UK, and packaging used in aircraft, ship and rail stores. The last two do not count towards the 10-tonne threshold either.
Registered businesses can get relief on components that are exported or converted into different chargeable components, by them or by another business with evidence. If you have already paid the tax, you claim a credit on a later return. If you intend to export components within 12 months of making or importing them, you can defer the tax, and the liability is cancelled once the export happens.
Returns and records
Registered businesses file a return each quarter and pay by the last working day of the month after the quarter ends. Weights are reported in kilograms, rounded down. You must keep records of the weight and recycled content of every component, and businesses that buy plastic packaging from others should carry out due diligence checks, or risk a secondary liability assessment for tax a supplier has not paid. From 1 April 2030 the government will require certification of mechanically recycled plastic for anyone relying on the 30% exemption.
What this calculator does not cover
- Part-year liability. It assumes you are liable for the whole year; tax only starts from your liability date;
- Credits and deferrals. Export and conversion credits are not deducted;
- Whether something is packaging. It does not test the definitions of packaging, finished components or substantial modification;
- Groups. Group registration and the joint liability of group members are not modelled;
- Exempt transport and stores packaging. Leave this out of every field.
Getting it right
Most PPT errors come from weighing components, evidencing recycled content and claiming credits. Our tax compliance team can set up registration, returns and record keeping, and our ecommerce accountants help online sellers who import packaged goods. If you are VAT registered, see the VAT Flat Rate Scheme calculator.