As highlighted in this recent Cooley blog post on restrictions on microplastics within the EU, governments across the world are considering ways to reduce the environmental harm caused by plastic waste – and, in particular, by single-use plastics.

Restrictions are, of course, one lever available to governments to change behaviour. In recent years, however, governments also have begun using the tax system to incentivise consumers and businesses away from the use of nonrecycled plastic material.

The UK is an early adopter of this tax-driven approach and has already brought its own plastic packaging tax (PPT) into law. We set out its key features below, together with some points to bear in mind. The EU, likewise, is keen to lead the way, but rather than introducing an EU-wide PPT, it has chosen to introduce a “plastics contribution” – owed directly by member states to the EU, with member states given flexibility as to how to fund their contributions.

As will be seen, PPTs are not without complexity, and the divergence of approaches taken by different governments (including within the EU) makes it all the more challenging for businesses to keep on top of their obligations. Being prepared – and taking timely advice – are essential.


The UK PPT came into force on 1 April 2022. At first glance, the tax may seem straightforward –a per-tonne charge on plastic packaging that does not contain at least 30% recycled material –but its scope can be complex.

It also is important to be aware that the UK PPT legislation contains a stringent compliance regime, with criminal sanctions in the case of fraudulent activity and the potential for secondary or joint and several liability where an unconnected business within a supply chain fails to pay its own UK PPT.

What is the UK PPT charged on, and who pays it?

The UK PPT is payable on chargeable plastic packaging components, either manufactured in or imported into the UK, at a rate of £210.82 per metric tonne. It is payable by manufacturers and importers.

A plastic packaging component is defined as any product that is designed to be suitable for use in the containment, protection, handling, delivery or presentation of goods at any stage in the supply chain. This broad definition, which can catch items that ought not to be within the scope of the UK PPT, is supplemented by extensive UK tax authority guidance. Businesses should consider taking specialist advice in order to assess whether particular items are in or out of scope.

A plastic packaging component will be chargeable if it is finished (that is, broadly, not subject to further modification) and if the proportion of recycled plastic in the component is less than 30%.

Registration requirements

A business within the scope of the UK PPT is required to register with the UK tax authority, but only if it manufactures or imports more than 10 tonnes of finished plastic packaging components in a 12-month period. Businesses generally have 30 days from the end of such 12-month period to register.

Exemptions, credits and reliefs

There are a number of exemptions, credits and reliefs. Certain products are not subject to the tax but count toward the 10-tonne threshold (such as plastic packaging for human medical products), whilst others are exempted entirely (such as “tertiary” packaging used to transport multiple sales units).

If a business intends to export a finished plastic packaging component, the liability to the UK PPT may be deferred and ultimately cancelled provided certain requirements are met.

Supply chain – secondary or joint and several liability

A business may be liable (on a secondary basis or jointly and severally liable) for the UK PPT where another party in the supply chain is liable and has failed to pay.

Accordingly, it is crucial that businesses understand the UK PPT status of their suppliers and customers and obtain appropriate verification that any PPT due from those parties has been paid in full.

Sanctions – including criminal liability

Criminal sanctions can be imposed in various circumstances, including cases of fraudulent evasion of the UK PPT or falsification of documents.

The EU plastics contribution

As mentioned above, the EU plastics contribution operates differently to the UK PPT.

Instead of there being an EU-wide PPT charge, each EU member state is required to make a payment (or “contribution”) to the EU, at a rate of 0.80 euros per kilogram of nonrecycled plastic packaging waste produced in that member state. It is then up to each member state whether to fund its plastics contribution by introducing its own PPT (or similar measure) or out of existing resources.

To date, only a handful of the largest member states have introduced taxes equivalent to the UK PPT. Spain is one example, which, as of 1 January 2023, imposes a tax on nonreusable plastic packaging at a rate of 0.45 euros per kilogram. Italy and Poland also have announced their intention to introduce a PPT in 2024. Elsewhere, there are several approaches, including no measures or plans at all and relatively limited charges on a narrow set of items.

Therefore, whilst there is a consistent policy intention across the EU to disincentivise the use of unrecycled plastic material, businesses have to grapple with a patchwork of different tax regimes within the EU – each with different scopes, rates and compliance burdens.

What should manufacturers and importers be doing now?

Businesses that manufacture or import plastic packaging should review whether their operations give rise to:

  • Obligations to register and/or account for PPT.
  • Potential exposures to PPT owing to defaults by other parties in supply chains.

This review should be ongoing and forward-looking, as jurisdictions continue to introduce PPTs or make amendments to existing rules.

If you have any queries in relation to the UK PPT, or have general enquiries regarding the direction of travel of plastic packaging taxation globally, please do not hesitate to reach out to any member of the Cooley UK tax team – the authors of this post.

Posted by Cooley