The Plastic Packaging Tax – everything you need to know

Does your business import or manufacture plastic packaging?

Does your plastic packaging contain less than 30% recycled content?

Then you may be subject to the Plastic Packaging Tax introduced by HMRC in April 2022.

The Plastic Packaging Tax is an environmental tax aimed at reducing plastic waste and promoting recycling. As of 1 April 2025, it is charged at £223.69 per metric tonne of qualifying plastic material.

In this guide, we provide a clear, concise overview of the tax and address any key questions you might have.

1. An overview of the Plastic Packaging Tax
2. The types of packaging affected
3. Business responsibilities and requirements
4. Additional considerations
5. Summary

The key points of the Plastic Packaging Tax at a glance:

• The tax applies to plastic packaging containing less than 30% of recycled material.
• UK manufacturers and importers of such packaging are liable for the tax.
• The rate is currently £223.69 per metric tonne, as of 1 April 2025.
• Even businesses that are not directly liable must keep records of their plastic packaging usage.
• The goal is to reduce plastic waste and increase recycling investment.

The UK generates around five million tonnes of plastic waste annually, with packaging accounting for approximately half of this. To reduce the reliance on landfill or exported waste, the government aims to stimulate investment in recycling through the Plastic Packaging Tax. By increasing the demand for recycled plastics, the intention is to boost collection rates and reduce environmental impact.

Businesses liable for the Plastic Packaging Tax must pay £223.69 per metric tonne of qualifying plastic packaging. Future adjustments may occur if demand for recycled material rises faster than supply.

The Plastic Packaging Tax applies to two types of packaging:

• Supply chain packaging: Packaging designed to be part of the product journey from manufacturer to consumer.
• Single-use consumer packaging: Products designed for one-time use by consumers, such as disposable plastic food trays or bags.

Plastic packaging with at least 30% recycled content is exempt from the tax but must still be recorded for compliance if it contribute toward the 10-tonne threshold within 12 months.

The new legislation defines two types of recycled packaging:

• Pre-consumer: Waste generated during manufacturing is reused at the same site. However, regrind material (immediate reuse of cutoffs) does not count toward recycled content.
• Post-consumer: Recycled from household or commercial waste.

Several plastic packaging products and components are exempt from the new tax:

• Packaging designed for long-term use (e.g., toolboxes, DVD cases).
• Packaging essential to product functionality (e.g., printer cartridges, tea bags).
• Medicinal packaging or transport packaging used solely for shipping imported goods.
• Packaging exported outside the UK within 12 months of manufacture or receipt.

For multi-material packaging, the tax applied to the entire item if plastic is the largest component by weight. Conversely, if plastic is a smaller portion, the tax does not apply.

Despite their environmental benefits, biodegradable, compostable, and bio-based plastics are still taxable unless they contein at least 30% recycled content.

Reusable containers such as totes are considered supply chain packaging and are taxable. However, protective cases in long-term storage are exempt.

There are two main groups that are responsible for paying the Plastic Packaging Tax – importers and manufacturers.

Manufacturers and importers of 10 or more tonnes of plastic packaging annually must register for and pay the tax. Importers are also liable for packaging that arrives pre-filled (e.g., beverage bottles).

Businesses liable for the Plastic Packaging Tax must maintain records for at least six years. These records should include:

• The weight of plastic packaging in tonnes, kilograms, or grams.
• Evidence supporting recycled content claims.
• Details of any exempt packaging exports.

While manufacturers and importers are primarily liable, other businesses in the supply chain may be held secondarily liable if they knowingly purchase non-compliant products.

Although HMRC does not require businesses to list the tax separately on invoices, it is recommended that they provide clear information about price changes linked to the tax for transparency.

Your suppliers may pass on additional costs even if your business is not directly liable for the tax. Open discussions with your suppliers can help mitigate unexpected price increases.

To reduce or avoid Plastic Packaging Tax costs, businesses can:

• Switch to plastic packaging containing at least 30% recycled content.
• Use alternaitve materials like paper-based packaging.
• Reduce plastic use by adopting lightweight designs.
• Choose reusable transit packaging wherever possible.

While the Plastic Packaging Tax presents implications for businesses, it also offers an opportunity to improve sustainability strategies. Companies can manage costs effectively by adopting recycled materials or exploring alternative solutions while supporting environmental goals.

To discuss sustainable packaging solutions, please get in touch with our specialists at Suttons Performance Pacakging for expert guidance.