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You could be liable for Plastic Packaging Tax from 1st April 2022

Plastic Packaging Tax (PPT) is one of the latest customs procedures that protect the environment, coming into effect from 1st April 2022.

The tax will be levied against your company if it imports, or manufactures, over 10 tonnes of finished plastic packaging components within a 12-month period. 

However, it will not be accounted for when calculating import duty during your customs clearance, but declared on a separate return by your accountant.

And, Plastic Packaging Tax will not apply to all types of packaging or as a % of weight or value.

When will I be liable for plastic packaging tax?

You will be liable for Plastic Packaging tax if your company imports and/or manufactures over 10 tonnes of finished plastic packaging components within a 12 month period. 

An article is categorised as a finished plastic packing component when it has completed all substantial modifications, which will apply to most shipping plastic packaging pieces.

During manufacturing, a substantial modification applies to processes that change the weight, shape, structure, or thickness of the article.

Examples of substantial modifications include, but are not limited to:

Extrusion – Where the raw plastic is pressed to form a new shape.

Moulding – Where plastic is put into a mould to form a new shape. 

Layering/Laminating – Where 2 or more layers are bonded together as a new article.

Forming – Where plastic is heated and the shape is altered.

Not all processes are classed as substantial modifications, though. The following are not considered to be substantial modifications:

Blowing – Where an article has a predetermined shape that is filled when hot air is applied.

Cutting – Where a larger piece is divided into multiple pieces.

Labelling or sealing – where a film or label is applied to the article.

It is important to note that the importer is liable for the Plastic Packaging Tax, and that this cannot be passed onto another buyer after import.

How is PPT calculated?

Plastic Packaging Tax is calculated by the weight of finished plastic components inside a shipments. If your company imports or manufactures over 10 tonnes of finished plastic components within any 12-month period, then you will be liable for the PPT. 

The current rate of PPT is £200 per tonne.

Note that the weight used only applies to the packaging within a shipment, and does not include the weight of the goods or commodity inside the packaging. 

The tax is not declared or levied by your customs broker, but by your accountant on the tax returns. This is because commodity codes are not subject to PPT as an additional levy, and manufacturers would not be able to declare PPT unless it was on an export customs clearance.

Do you need help with Plastic Packaging Tax?

UK Customs Solutions are not tax advisors, and Plastic Packaging Tax is not levied during a customs clearance, so we are unable to provide specific advice to you. 

However, HMRC have recorded a webinar which could be of use to you. 

For assistance with anything else related to customs clearance and brokerage, please 
contact one of our experts now. 

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