Plastic Packaging Tax is charged at £228.82 per tonne, from 1 April 2026, on finished plastic packaging components made in or imported into the UK that contain less than 30% recycled plastic. A business must register once it manufactures or imports 10 tonnes or more of finished components in a 12 month period, or expects to in the next 30 days, and must keep component level records proving weights, recycled content and any exemptions.

What does the tax apply to?

The charge is in section 43 of the Finance Act 2021. It arises when a chargeable plastic packaging component is produced in the UK by a person acting in the course of a business, or imported into the UK on behalf of such a person. Section 44 makes the producer liable for UK made components and the person on whose behalf an import is made liable for imports. Section 43(2A) treats a person who is neither registered nor liable to register as not acting in the course of a business, which is how small producers stay outside the charge.

HMRC’s guidance on which packaging is subject to the tax explains the building blocks:

  • Plastic means a polymer material, including additives. Biodegradable, compostable and oxo degradable polymers count. Unmodified cellulose such as viscose does not; chemically modified cellulose such as cellulose acetate does.
  • Multi material components are plastic if plastic is the heaviest single material by weight compared with glass, aluminium, steel, other metals, paper and board, wood or any other substance.
  • Packaging is either designed for use in the supply chain to contain, protect, handle, present or deliver goods, such as ready meal trays and yoghurt pots, or single use consumer packaging such as carrier bags, disposable cups and gift ribbon.
  • Each component is taxed separately. A drinks bottle, its cap and its label are three components.

Who is the manufacturer when several businesses are involved?

A component is finished when it has undergone its last substantial modification, meaning a process that changes its shape, structure, thickness or weight, such as extrusion, forming, laminating, moulding or printing. HMRC lists four processes that never count as substantial modifications: blowing from a preform, cutting, labelling and sealing. If the last substantial modification happens as part of filling, the component is treated as finished at the one before.

So if Business A extrudes bottle preforms and Business B blows them into bottles, Business A is liable, because blowing is excluded. If a converter prints and perforates film that a food packer later forms into bags while filling, the printer is liable. Importers of filled goods are liable on every plastic component of the packaging around them.

When must a business register?

HMRC’s registration guidance sets two tests, and you must register within 30 days of meeting either:

  1. Forward look. At any time, if you expect to manufacture or import 10 tonnes or more of finished components in the next 30 days. You are liable from the date you had reason to expect this.
  2. Look back. At the end of each month, if you have manufactured or imported 10 tonnes or more in the last 12 months. You are liable from the first day of the following month.

If both tests are met, the earlier date applies. Packaging with 30% or more recycled content, packaging for licensed human medicines and packaging permanently set aside for non packaging use all count towards the 10 tonnes even though they are not taxed. Transport packaging on imported goods and stores for international journeys do not count. Partnerships register if any partner meets the threshold, and companies under common control may register as a group with a UK established representative member, though an overseas business without a UK establishment cannot join a group. Failing to register on time can lead to a failure to notify penalty.

How does the 30% recycled content threshold work?

A component containing 30% or more recycled plastic, measured as a proportion of the total weight of plastic in it, is not chargeable. HMRC assumes all plastic is virgin unless there is evidence otherwise. Recycled plastic means plastic waste reprocessed by a mechanical or chemical process so that it can be used as a raw material; organic recycling does not count.

  • Post consumer plastic comes from households, commercial, industrial and institutional end users, including returns from the distribution chain.
  • Pre consumer plastic is recovered manufacturing waste that has been reprocessed. Scrap or regrind put straight back into production after only shredding or grinding never counts. HMRC’s guidance says reprocessed pre consumer plastic can be counted only before 1 April 2027.
  • Chemically recycled plastic can be counted from 1 April 2027 only through a certified mass balance approach, with every business in the chain certified to the minimum requirements. Without it, chemically recycled content is treated as virgin.

Which packaging is exempt or excluded?

Exempt packaging covers immediate packaging for licensed human medicines, components permanently recorded as set aside for non packaging use (HMRC gives film for coating whiteboards and silage film as examples), transport packaging such as pallet wrap and crates used to import goods, and packaging used in stores on international aircraft, ships and trains. Excluded packaging, which does not count at all, is packaging designed for long term storage such as toolboxes, packaging that is an integral part of the goods, and packaging designed to be reused for presentation.

What records must be kept?

HMRC’s records guidance requires accounts and records for at least six years from the end of the accounting period, with weights in tonnes, kilograms and grams. They must be kept by product line, meaning a group of components made to the same specification, and show:

  • the weight of components finished or imported each period, and how each return figure was calculated
  • evidence for each exemption claimed, for example medicine licence numbers
  • for the 30% threshold: how the percentage was worked out, evidence that recycled plastic was used and its source, the dates and product lines it relates to, and fresh evidence whenever a specification changes
  • for exports: documents dated at or before production or import showing intent to export, then proof of the export, its weight and date
  • for credits on converted or exported components: the tax paid, when and how it was paid, and evidence of the conversion or export

Importers proving recycled content need evidence from the manufacturer or a robust supply chain audit. Weights must come from an approved weighing method; estimates are not one. Every business that manufactures, imports or buys plastic packaging should also run proportionate due diligence checks at least every 12 months, because a business that does not can be held jointly and severally liable for tax others leave unpaid.

How are returns and payments made?

Returns are quarterly for periods ending 30 June, 30 September, 31 December and 31 March. Each return and its payment are due by the last working day of the month after the period ends, and weights are reported in kilograms, rounded down. Corrections should be made within four years of the original due date. HMRC’s penalties guidance sets late return penalties starting at £100 and rising to £200, £300 and £400 for further late returns within 12 months. For the wider deadline picture see our UK tax deadlines calendar.

What does the charge look like?

Illustration only. A food producer imports 30 tonnes of filled trays in the April to June 2026 quarter. Line A, 18 tonnes of trays, has 20% recycled content; line B, 12 tonnes, has 35% recycled content backed by the manufacturer’s specification and audit evidence.

Line Weight Treatment Tax
A 18,000 kg Below 30%, chargeable 18 × £228.82 = £4,118.76
B 12,000 kg 30% or more, not chargeable but counted for the threshold Nil

The common error here is treating line B as if it did not exist; it still goes on the return and still needs records. Plastic Packaging Tax is one of several environmental taxes, alongside the Aggregates Levy and the Climate Change Levy.

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Sources

Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.