UK Plastic Packaging Tax: New Rules From April 2027

The UK Plastic Packaging Tax rules will change from 1 April 2027, particularly for businesses using chemically recycled plastic and pre-consumer plastic waste.

From that date:

• Businesses can use a certified mass-balance approach to account for chemically recycled plastic
• Pre-consumer plastic waste will no longer count as recycled plastic for Plastic Packaging Tax purposes
• Packaging containing at least 30% qualifying recycled plastic can still be exempt from the tax
• Packaging containing 30% or more recycled plastic will still count towards the 10-tonne registration threshold
• Businesses using chemically recycled plastic will need stronger certification, attribution and record-keeping evidence

The changes will be particularly important for manufacturers and importers that rely on recycled-content calculations to reduce or eliminate their Plastic Packaging Tax liability.

What Is UK Plastic Packaging Tax?

UK Plastic Packaging Tax, commonly called PPT, is a tax on certain finished plastic packaging components manufactured in or imported into the UK. The tax generally applies where a finished plastic packaging component contains less than 30% recycled plastic.

Businesses must also consider the registration threshold.

You normally need to register for Plastic Packaging Tax if you:

• Expect to manufacture or import 10 tonnes or more of finished plastic packaging components in the next 30 days
• Have manufactured or imported 10 tonnes or more during the previous 12 months

The threshold is based on the weight of relevant finished plastic packaging components rather than only the amount that ultimately attracts tax.

What Is Changing From 1 April 2027?

The new Plastic Packaging Tax rules introduce two major changes.

Chemically Recycled Plastic

A new mass-balance approach will allow businesses to attribute chemically recycled plastic to packaging components where recycled and virgin materials are mixed during production.

Pre-Consumer Plastic Waste

Pre-consumer plastic waste will no longer qualify as recycled plastic when calculating recycled content for PPT.

This means some packaging that currently reaches the 30% recycled-content threshold may fall below it from April 2027.

Businesses should review both changes before the new rules begin.

What Is Chemically Recycled Plastic?

Chemical recycling processes convert plastic waste using processes that alter its chemical structure.

The resulting material can then be used as an input for producing new plastic.

One practical difficulty is that chemically recycled and virgin raw materials may become mixed during production.

It may therefore be impossible to identify which physical molecules in an individual finished package came from recycled material.

The new mass-balance system is designed to address this problem.

What Is the Mass-Balance Approach?

The mass-balance approach allows qualifying recycled material to be attributed to particular plastic packaging even where recycled and virgin materials are physically mixed during production.

Instead of tracing specific recycled molecules into a particular item of packaging, the business maintains accounting records showing how qualifying recycled material entered and moved through the production process.

From 1 April 2027, this approach can be used for Plastic Packaging Tax where the required conditions are met.

Is the Mass-Balance Approach Mandatory?

No. Using the mass-balance approach is optional.

However, there is an important consequence if a business does not use it.

Where chemically recycled plastic is used but the business does not apply a qualifying mass-balance approach, that material must generally be treated as non-recycled or virgin plastic when calculating recycled content for PPT.

For businesses relying heavily on chemical recycling, this could materially affect whether packaging reaches the 30% recycled-content threshold.

Who Can Use the Mass-Balance Approach?

The approach can be used where businesses:

• Manufacture plastic packaging in the UK using chemically recycled material
• Import finished plastic packaging manufactured using chemically recycled material

Businesses involved in the supply chain must also meet the relevant certification requirements.

The precise certification responsibilities depend on where the business sits within the supply chain.

Do Manufacturers Need Certification?

Yes. A business manufacturing plastic packaging using chemically recycled material will generally need to be certified under an appropriate chemical recycling certification scheme that meets HMRC’s minimum requirements.

The certification system is intended to demonstrate that recycled material has been correctly accounted for and attributed.

Businesses should not assume that any commercial environmental certification automatically satisfies the PPT rules.

The scheme must meet the minimum requirements set for Plastic Packaging Tax.

Do Importers Need Certification?

It depends on the role of the importer.

If a business imports finished plastic packaging where a mass-balance approach has already been used, the importer itself does not necessarily need to hold certification.

However, it must still:

• Check that the relevant supply chain is appropriately certified
• Obtain evidence from suppliers
• Retain certificates
• Obtain attribution declarations
• Carry out appropriate due diligence

The importer remains responsible for supporting the recycled-content treatment used in its PPT calculations.

What Is an Attribution Declaration?

An attribution declaration provides evidence showing how much chemically recycled material has been allocated to a particular batch or supply.

Businesses using attributed recycled plastic should receive a completed declaration for each relevant batch.

They need to check that the declaration is complete.

If the required information is missing, the business may not be able to treat the attributed material as recycled plastic when claiming the PPT exemption.

What Certification Evidence Should Businesses Check?

Businesses should check that suppliers are covered by a certification scheme meeting the PPT minimum requirements.

Certification schemes must provide an electronic register allowing businesses to verify information such as:

• Supplier name
• Certification status
• Certificate number
• Products covered
• Relevant certification dates

Businesses should verify certification rather than relying solely on a supplier saying that its material is recycled.

What Records Must Be Kept?

Businesses using the mass-balance approach need a clear evidence trail.

Relevant records can include:

• Valid certification documents
• Supplier certificates
• Attribution declarations
• Supply-chain evidence
• Due diligence checks
• Material quantities
• Recycled-content calculations
• Plastic packaging weights
• PPT return calculations

Records associated with the mass-balance system generally need to be retained for six years.

This makes documentation an important part of qualifying for the recycled-content treatment.

What Happens If HMRC Cannot Verify the Recycled Content?

HMRC may request evidence during a compliance check.

This can include:

• Certificates
• Attribution declarations
• Supply-chain records
• Recycled-content calculations

If the business cannot provide adequate evidence, HMRC may treat the relevant material as non-recycled plastic.

That could result in Plastic Packaging Tax becoming payable on packaging previously treated as exempt.

Penalties may also apply where the mass-balance conditions have not been met correctly. Businesses seeking HMRC compliance in Fulham support can review certification records, attribution declarations and recycled-content evidence to prepare for potential Plastic Packaging Tax compliance checks.

What Is Changing for Pre-Consumer Plastic Waste?

From 1 April 2027, pre-consumer plastic waste will stop being treated as recycled plastic for Plastic Packaging Tax purposes.

Pre-consumer plastic can include waste produced during manufacturing before a product reaches the consumer.

Under the new rules, this type of material will no longer count towards the percentage of recycled plastic used to determine whether a packaging component meets the 30% exemption threshold.

This is one of the most important practical changes for businesses already claiming recycled-content exemptions.

Why Does Removing Pre-Consumer Plastic Matter?

A packaging component may currently qualify as containing at least 30% recycled plastic because the calculation includes pre-consumer material.

From April 2027, that material may need to be removed from the recycled-content calculation.

For example:

Under the current approach, the packaging could exceed the 30% threshold.

From April 2027, it could fall below the threshold and become chargeable to Plastic Packaging Tax.

What Is the 30% Recycled Plastic Rule?

Plastic packaging containing 30% or more qualifying recycled plastic by weight is generally not chargeable to Plastic Packaging Tax.

However, businesses still need evidence supporting the recycled-content percentage.

From April 2027, the calculation may include qualifying:

• Mechanically recycled plastic
• Chemically recycled plastic attributed through an approved mass-balance approach

It will no longer include pre-consumer plastic waste as qualifying recycled material.

Does Exempt Packaging Count Towards the 10-Tonne Threshold?

Yes. This is an important distinction.

Plastic packaging containing at least 30% recycled plastic may be exempt from the actual tax, but its weight can still count towards the 10-tonne registration threshold.

This means a business may still need to register and submit PPT returns even where much or all of its packaging does not ultimately attract tax.

Businesses should therefore distinguish between:

Registration threshold → Determines whether you need to register

and

30% recycled-content test → Determines whether a particular packaging component is chargeable

What Is the Plastic Packaging Tax Rate?

The current HMRC Plastic Packaging Tax rate is £228.82 per tonne of finished plastic packaging components containing less than 30% recycled plastic.

For example:

Businesses should check the applicable rate for the relevant accounting period because PPT rates can change.

Who Has to Pay Plastic Packaging Tax?

The person responsible for the tax will generally be the business that:

• Manufactures finished plastic packaging components in the UK
• Imports finished plastic packaging components into the UK

Businesses further down the supply chain may not directly pay Plastic Packaging Tax to HMRC, but they can still be affected through:

• Supplier pricing
• Due diligence requirements
• Contract terms
• Recycled-content evidence
• Supply-chain costs

Importers should pay particular attention because they may depend heavily on overseas suppliers for reliable recycled-content information.

What Packaging Is Subject to PPT?

Plastic Packaging Tax generally applies to finished plastic packaging components that contain more plastic by weight than any other single substance and are designed for packaging purposes.

This can include packaging designed to:

• Contain goods
• Protect goods
• Handle goods
• Present goods
• Deliver goods

Some packaging is excluded or exempt under specific rules. Each packaging component should be assessed separately.

How Do Businesses Calculate Recycled Content?

Recycled content is generally calculated by reference to the weight of qualifying recycled plastic within the finished packaging component.

For example, suppose a finished packaging component weighs 1 kilogram and contains:

• 350 grams of qualifying recycled plastic
• 650 grams of virgin plastic

The recycled-content percentage is:

350g ÷ 1,000g × 100 = 35%

The component would generally meet the 30% recycled-content threshold.

From April 2027, businesses need to make sure only plastic that qualifies under the revised definition is included in that numerator. Working with a data-driven accountant in Farringdon manufacturers can consult may help maintain accurate recycled-content calculations, analyse packaging data and assess potential Plastic Packaging Tax liabilities.

How Can the New Rules Affect Packaging Costs?

The April 2027 changes can affect product costing in several ways.

A business may face higher tax costs if:

• Pre-consumer plastic previously counted as recycled material
• Chemically recycled material cannot be supported by compliant certification
• Supplier evidence is incomplete
• Packaging falls below the 30% threshold

Businesses may therefore need to reconsider:

• Packaging specifications
• Supplier contracts
• Material sourcing
• Product pricing
• Gross margins
• Procurement policies

The tax impact should ideally be modelled before the rules take effect. Manufacturers and importers affected by the new rules may benefit from professional Plastic Packaging Tax accounting services in Fulham when reviewing recycled-content calculations, registration requirements, quarterly returns and potential PPT liabilities.

How Could the Rules Affect Importers?

Importers can face particular challenges because much of the evidence may originate overseas.

They may need to obtain:

• Supplier certificates
• Attribution declarations
• Manufacturing information
• Recycled-content evidence
• Supply-chain certification details

An overseas supplier saying that packaging contains recycled plastic may not be sufficient for UK PPT purposes.

Importers need evidence that meets HMRC’s requirements. Online retailers seeking an accountant for e-commerce in Wimbledon can receive guidance on reviewing imported packaging records, understanding Plastic Packaging Tax registration requirements and assessing related compliance costs.

What Should Businesses Ask Suppliers?

Businesses should start discussing the April 2027 requirements with suppliers now.

Useful questions include:

1. What Percentage of the Packaging Is Recycled Plastic?
2. Is Any Recycled Content Pre-Consumer Plastic?
3. Is Chemically Recycled Plastic Used?
4. Is a Mass-Balance Approach Used?
5. Which Certification Scheme Covers the Supply Chain?
6. Can You Provide a Valid Certificate?
7. Will Attribution Declarations Be Available?
8. Can You Provide Evidence for Each Relevant Batch?
9. Will Packaging Specifications Change Before April 2027?
10. Who Will Be Responsible for Maintaining Supporting Records?

Early supplier discussions can prevent evidence problems after the rules begin.

What Is the Difference Between Chemical and Mechanical Recycling?

Mechanical recycling generally involves processing plastic waste physically so it can be used again.

Processes may include:

• Sorting
• Washing
• Shredding
• Melting
• Reprocessing

Chemical recycling changes the chemical structure of the plastic waste before converting it into material that can be used in new production.

The new mass-balance rules are specifically important because chemical recycling processes can mix recycled and virgin feedstocks.

Does Mechanical Recycling Need the Mass-Balance Approach?

No. The new mass-balance provisions are designed specifically to deal with qualifying chemically recycled plastic.

Mechanically recycled plastic continues to be dealt with under the normal recycled-content rules.

Businesses should nevertheless keep appropriate evidence demonstrating how much mechanically recycled material their packaging contains.

How Often Do Businesses Submit Plastic Packaging Tax Returns?

Registered businesses generally submit Plastic Packaging Tax returns quarterly.

Businesses need records supporting the figures reported on each return.

Their accounts should show how they calculated:

• Packaging manufactured
• Packaging imported
• Chargeable packaging
• Exempt packaging
• Recycled content
• Export relief
• Adjustments

Records generally need to be retained for at least six years.

What Should Businesses Do Before April 2027?

Businesses affected by the new Plastic Packaging Tax rules should review their position well before 1 April 2027.

A practical preparation process is:

1. Identify All Plastic Packaging Components
2. Review Current Recycled-Content Calculations
3. Identify Any Pre-Consumer Plastic Currently Included
4. Identify Chemically Recycled Material
5. Review Suppliers and Certification
6. Obtain Appropriate Certificates
7. Prepare for Attribution Declarations
8. Check Six-Year Record-Keeping Procedures
9. Recalculate Packaging Likely to Fall Below 30%
10. Estimate Additional PPT Liability
11. Review Product Pricing
12. Update Accounting and Procurement Systems

The objective is to understand both compliance requirements and the financial impact before the rules become mandatory.

CASE STUDY: Helping a Importer Prepare for the April 2027 Plastic Packaging Tax Changes

A packaging importer contacted our Wimbledon office after reviewing the upcoming changes to the UK Plastic Packaging Tax from 1 April 2027.

The business imported finished plastic packaging from several overseas suppliers and relied on recycled-content percentages to determine whether individual packaging components met the 30% exemption threshold. Management was concerned that some packaging currently treated as exempt included pre-consumer plastic waste that would no longer qualify as recycled plastic under the new rules.

CIGMA Accounting reviewed the company’s packaging specifications, import volumes, supplier documentation and existing PPT calculations.

The review identified several products where removing pre-consumer plastic from the recycled-content calculation could reduce qualifying recycled content below 30%, potentially creating an additional Plastic Packaging Tax liability.

We also reviewed packaging containing chemically recycled plastic. The company was advised that from April 2027, using a qualifying mass-balance approach would require appropriate certification, supplier evidence and attribution declarations.

Because much of this information originated overseas, we helped the business create a supplier-check process covering certification status, recycled-content evidence, attribution declarations and supporting records.

The company then modelled the potential additional PPT cost and considered whether packaging specifications, supplier contracts or product pricing needed to change before April 2027.

The client left with a clearer understanding of their position, options, and next steps.