It's been over a year since the Plastic Packaging Tax (PPT) came into effect. Dan Rice and Marcus Feld reflect on their experiences helping clients manage PPT liabilities and ask what does the future hold for PPT?

The UK government introduced the Plastic Packaging Tax (PPT) on 1 April 2022 at a rate of £200 per tonne. On 1 April 2023, this increased to £210.82 per tonne. The aim was to incentivise the use of recycled plastic by allowing for plastic packaging that contains more 30% recycled plastic to remain outside the scope of the tax. This would promote the use of recycled plastics as an input in the casting of polymers and ultimately decrease the amount of non-biodegradable packaging in circulation.

There were several unknowns about PPT when it was introduced, however, HMRC provided an exemption for plastic packaging used for transport purposes or medicinal products, for example, but how would these exemptions be applied within the meaning of the legislation?

With an HMRC consultation about recycled content packaging closed, we've outlined some of the common areas of concern we've seen and how PPT might be changing in future.

Uncertainty over PPT liability

Liability to PPT

With PPT coming in after the UK left the EU on the 31 December 2020, many businesses had carried out supply chain reviews or similar exercises as part of their business interruption risk planning. They were able to leverage this information to start mapping where plastic was being introduced to the UK by way of manufacture or import. With plastic often forming part of a product, however, there was uncertainty about elements not disposed of immediately before use. Do such plastic components count as packaging and are they within the scope of the tax or not?

Exemption application

There was a particular question for businesses in the pharmaceutical sector about how the exemption for medical products applied because liquid pharmaceutical products will often include a plastic apparatus to ease dispensing. These businesses had significant uncertainty on whether the plastic apparatus was in the scope of PPT or benefitted from the exemption. We supported our clients with their analysis to determine this.


Many identified that they were liable to PPT because of the plastic packaging they introduced into the UK via imported goods. With much of the packaging being sophisticated in its application, the importing business didn't have consistent accurate weights of packaging used to contain products. Conversations with international suppliers to obtain this information weren't made any easier by suppliers often lacking knowledge on PPT specifics.


Once businesses concluded that they were within scope of PPT and determined where plastic packaging existed within their supply chains, they then had to identify if their systems captured the right information. Often business systems did not – and a suitable and cost-effective solution needed to be found to quantify how much plastic they had introduced.

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More changes to come on Plastic Packaging Tax

Amendments to PPT legislation

Following engagement with stakeholders, HMRC run a consultation on introducing new methods of measurement to determine the recycled content of packaging.

Many businesses are looking to introduce plastic packaging that contains recycled plastics. But due to the nature of certain manufactured products, such as pharmaceuticals or food, if recycled plastics are used, it must be of a high grade to avoid contaminating the product.

One solution is to use plastic that has been chemically recycled, which removes any impurities in the plastic being recycled. But the drawback is that the chain of custody is lost – since the chemical recycling process is so refined, it denies businesses the ability to keep track of the recycled inputs. As a result, they're unable to obtain the necessary proof required to consider their recycled plastic outside the scope of the tax.

To overcome this, HMRC is consulting on introducing legislation to allow for a ‘Mass Balance Approach’. This looks to introduce new methods of accounting for chemically recycled plastic, together with the use of certification schemes that meet International Organization for Standardization (ISO) standards to re-establish the chain of custody. Ultimately, this should give businesses more access to prove that their plastic packaging contains enough recycled plastic.

If the approach works, it should also reduce the need for an exemption for medicinal products according to HMRC – something for business claiming the exemption to bear in mind in the future.

Extended Producer Responsibility (EPR)

There have been changes to the Extended Producer Responsibility scheme, an environmental initiative, which is closely related to PPT. Those affected by EPR have been required to record data about the packaging they introduce into the UK by way of manufacture or import from the 1 January 2023. Depending on their size, businesses will need to start reporting this data to DEFRA from October 2023. Initially businesses were to begin paying EPR fees in 2024 and this has now been deferred to 2025.

Rate of PPT

The Treasury has increased the rate of PPT by just over five percent – an incremental increase of £10.82 per tonne for 2023 and an additional increase in line with CPI to £217.85 per tonne from the 1st of April 2024 – a further incremental increase of £7.03. Given that the nature of the tax is to promote a change in behaviour, if the desired outcomes aren't achieved, might this mean a drastic increase in the PPT rate in the future? A comparable tax may be the UK landfill tax, which raised £845 million in 2021 for the Treasury compared with £113 million in 1996 (the tax’s first year) – an increase more than six times.

Since PPT was introduced, we've observed a significant theme. HMRC and other government departments are engaging with stakeholders to ensure that PPT's intended behavioural outcomes are achieved. The government is also innovating to develop the necessary tools so that legislation introduced is technically competent to achieve policy.

This is strong indication of the government’s commitment to delivering its environmental strategy. We expect there to be many more changes to come that businesses need to remain aware of so that they can respond in time.

For more information and guidance, contact Daniel Rice.

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