Plastic Packaging Tax: do you need to register?

Plastic Packaging Tax: do you need to register?

What is Plastic Packaging Tax (PPT)?

If a business manufactures or imports over the relevant threshold of 10 tonnes in a 12-month period, they are required to register with HMRC, even if the product contains 30% or more recycled plastic. However, even if a business meets the ‘test’ for registration and reporting purposes, it may not be liable to pay the tax as this only applies to finished products.

If a business does not import or manufacture, but purchases products which fall within the scope of the new tax from a UK importer or manufacturer, the business may need to confirm with their supplier whether PPT has been paid on any “finished” products. This is when the product has undergone its last substantial modification.

It is important that businesses carry out due diligence checks in respect of Plastic Packaging Tax to avoid being held jointly and severally liable (or secondarily liable) for any unpaid Plastic Packaging Tax.

The Plastic Packaging Tax is charged at £200 per metric tonne of plastic packaging.

When does it not apply?

There are also important concessions connected to PPT. For example, if a business were to export any plastic packaging on finished products which may in principle be caught by the PPT criteria, any liability to pay the tax may be subsequently rebated providing that the business can evidence the direct export of the goods outside of the UK.

Registering for PPT

It is now possible to register for PPT, and HMRC say a business must do so within 30 days of meeting the following criteria:

• Expect to import into or manufacture in the UK 10 tonnes or more of finished plastic packaging components in the next 30 days (referred to as the “Look Forward” test)
• Have imported into or manufactured in the UK 10 tonnes of finished plastic packaging components since 1 April 2022 (referred to as the “Look Back” test).

Businesses may be liable to pay a penalty if they fail to register accordingly. Further information on registering for PPT can be found here.

The PPT return and payment of the tax for the first quarter (1 April 2022 to 30 June 2022) is due on 29 July 2022.

One point to highlight is that HMRC has delayed the introduction of a requirement to include a ‘PPT statement’ with an invoice to confirm that the tax has been paid.

We are here to help

For further information regarding Plastic Packaging Tax, please speak with your usual Azets contact or a member of our specialist team.