Plastic Packaging Tax And Its Effect On Businesses

From April 2022, the UK introduced a new tax on plastic packaging that contains less than 30% recycled content. The Plastic Packaging Tax (PPT) will cost businesses £200 per tonne, and is thought to affect up to 20,000 businesses.

Plastic Packaging Tax

Let us take a look at the Plastic Packaging Tax and the consequences of its imposition for businesses.

What Is The PPT?

The Plastic Packaging Tax (PPT) is a new tax introduced by the UK Government, coming into force in April 2022. The aim is to charge businesses that use plastic packaging with less than 30% recycled content £200 per tonne.

It is thought that this tax will affect around 20,000 packaging producers and importers and pallet wrap manufacturers in the UK.

What Are The Aims Of The PPT Tax?

The Government wants to reduce plastic packaging as part of a wider goal of making the UK more environmentally friendly. The taxes on sugar and on single-use plastic carrier bags saw changes in the ways people shopped and variations in how companies dealt with these tax increases.

More manufacturers started to produce products with reduced sugar, while retailers pushed reusable carrier bags. It is hoped that the PPT will have a similar impact on the companies that use plastics to reduce the amount of ‘virgin’ plastic used and increase the recycled content to at least 30%.

What Is The Effect On Businesses?

Many smaller plastic manufacturers are becoming concerned about the impact such a tax will have on their operations. At a time when many companies are recovering from the disruption of the past two years, this is seen as another hurdle.

Importers are also concerned about what this might mean for products they import from other countries. Many are unsure whether the plastics used in imported goods will be treated to the same level of taxation, and who will be responsible for paying the tax.

Will The Costs Be Passed On?

Both manufacturers and importers will now have to negotiate with plastic suppliers to try and encourage more recycled materials. However, this process could take some time to implement and so companies are thinking about whether this tax should be passed on to customers or absorbed by the company.

It is thought that this could lead to a short-term rise in the cost of products from manufacturers that are still looking at changing their packaging. With the cost of living already on the increase, this will lead to further problems for the consumer.

Are Other Countries Are Doing The Same Thing?

Spain and Italy have introduced their own version of PPT since January 2022, and other EU countries are also thought to be considering such measures in the near future.

This means that in the future, companies and manufacturers will need to be aware of the rules on plastics when they import or export to other countries.

What Can Companies Do?

There are a few ways that companies can adjust their products or manufacturing process to cater for the introduction of PPT.

  • Talk to your suppliers and see if they are already producing plastics with at least 30% recycled materials. They may have this option already, so you will only need to transfer which plastic you order.
  • Liaise with your design team to see if plastics with a minimum of 30% recycled material can be used effectively in your products or packaging.
  • If the packaging you use cannot be made using recycled materials, decide how you can deal with the PPT and whether this will need to be passed on to your customers or can be absorbed by the company.
  • Liaise with HM Revenue & Customs (HMRC) to see if there is any further guidance on how this tax will be implemented and collected. They can also answer any questions you may have about your company and the requirements.
  • Your own team will also need to look at how the tax will be calculated and what records will need to be kept and produced when shipping products or supplies.
  • Talk to fellow business owners about how they have dealt with the introduction of PPT and what problems they needed to solve along the way. This could help you progress a lot faster and create workable solutions.


The introduction of the PPT is designed to help the UK deal with the growing environmental issues that are surfacing. However, for businesses, PPT presents new challenges that will need to be solved and potentially new partnerships created. By asking questions and discussing the implications, you can start to develop ideas that will be beneficial for you and your customers.