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UK Plastic Packaging Tax – April 2022

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Prepare your business for the new UK Plastic Packaging Tax legislation

The UK’s new Plastic Packaging Taxes (PPT) could affect your e-commerce business if you are established in or importing goods into the UK from 1st April 2022.

Following on from the launches of new EPR legislation in France and Germany, HMRC has recently announced the implementation a new indirect tax from the 1st April 2022, the Plastic Packaging Tax, or PPT. AVASK have a team of dedicated tax experts who can ensure you are remaining complaint when importing your goods into the UK.

PPT will apply to any plastic packaging manufactured in, or imported into the UK, which does not contain at least 30% recycled plastic. However, if you are a manufacturer and/or importer who produces less than 10 tonnes of plastic packaging within a 12-month period, this will not apply to you.

HMRC have introduced this new tax on plastic packaging in response to the ever-increasing need to reduce our environmental impact, worldwide. This tax will also play an important role in encouraging and incentivising businesses to use more eco-friendly packaging and recycled plastics; the wider aim is to reduce our reliance on virgin plastics while consequently ensuring that less plastic will end up in landfill.

The UK Government are currently in consultation to determine how these new regulations will be implemented. We will provide a further update to our clients and those affected by these changes as soon as the new legislation is passed.

What do you need to know about Plastic Packaging Tax (PPT)?

A PPT charge will arise when a chargeable plastic packaging component is produced in the UK by a business or where it is imported into the UK by a business. The tax only applies to ‘finished’ products, and this will likely vary from product to product. The AVASK team operates a consultative approach to PPT, our expert advisers will provide individual, tailored advice in relation to your e-commerce business’ specific products.

However, you need to bear in mind that each ‘finished’ product is individually chargeable. There are two types of plastic packaging subject to PPT, where the packaging is designed to be suitable for:

  • Use in the supply chain;
  • by the customer.

This new taxation is complex and will therefore require you to take immediate action to ensure that your e-commerce business remains fully compliant once these new changes have been implemented. It has been advised that PPT will be chargeable at £200.00 a tonne, however further information from the UK Government will be released imminently. Contact the AVASK team to speak to one of our dedicated experts, and receive tailored advice to suit your individual e-commerce business needs.

How do I register for PPT?

Manufacturers or importers of plastic packaging are required to register for PPT if any of the following applies to them:

  • If, at any time after 1st April 2022, your business expects to import or manufacture at least 10 tonnes of plastic packaging in the following 30 days. The registration must occur within 30 days of the first day this condition is met;
  • Your business has manufactured or imported at least 10 tonnes of plastic packaging within a 12-month period ending on the last day of the calendar month. In this instance, your business will be liable for PPT from the first day of the next month and must register before the first day of the subsequent month. During the first year of PPT, a business need only to register for the tax when the amount of plastic packaging exceeds 10 tonnes in a 12-month period from 1st April 2022.

If your business meets either of these requirements, even if your packaging is exempt from charges, you must still register for PPT. Guidance on the registration process is available on the HMRC website, however, it is important to note that no registrations can be made until the official launch of the PPT on 1st, April 2022.

PPT returns will need to submitted quarterly. The PPT returns and resulting payments to HMRC will be due by no later than the last working day of the month following period end.  

AVASK are here to support your business. Our global team of e-commerce accounting and cross-border tax experts provide person-centred solutions tailored to the needs of our clients. Regardless of whether your busines operates in one marketplace or many, we can ensure you remain compliant leaving you to focus on the development of your business.

Finally, here are some crucial points to keep in mind:

  • PPT guidance is subject to change until all legislation is approved by Parliament. It will continue to be updated.
  • PPT in the UK is currently separate from EPR requirements that have been introduced in Germany and France – the UK is on track to introduce EPR from 2023.  

If you have any questions about the new PPT legislation, please contact AVASK today. You can also telephone us on: +44 (0)23 8060 0120 or email: enquiries@avaskgroup.com.