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PPT was introduced in the UK from 1 April 2022. It is a tax on plastic packaging imported and manufactured in the UK, where the recycled content is less than 30%.

The UK government passed the tax to encourage manufacturers to switch to recycled or biodegradable packaging and reduce the use of virgin plastics.

PPT applies not only to packaging imported into the UK, but on all packaging around products which are imported into the UK.

There are a number of exemptions which apply, including an exemption for the immediate packaging of medicinal products. This exemption is very narrow in application, and only applies to immediate packaging for licenced human medicine.

Items falling under exemption still count towards the registration threshold and need to be reported to HMRC via the quarterly PPT return submission.

A recent HMRC publication suggests only 3,000 entities have registered for PPT – the initial estimate suggested over 20,000 entities would be required to register. This suggests there is still confusion in the market over where registration is required.

HMRC are writing to unregistered organisations to confirm whether the limits are exceeded, or if not, to confirm what evidence is held to support this.

What can NHS organisations do about PPT?

Helping NHS organisations assess whether PPT could pose a risk . Our FAQ document can help identify whether an appropriate exercise has been undertaken to consider HMRC compliance. Examples can be found below.

• Do you know if you are under the threshold (currently 10-tonnes per annum)?
• Can you provide an audit trail confirming this to HMRC if they ask?
• Are you relying upon the exemption for medicinal products?
• If so, has the exemption been interpreted correcting, in accordance with the limited application allowed?

How can 91̽»¨help?

If your NHS organisation would like support with plastic packaging tax, please contact Jamie Jarrett or Scott Harwood.

1: Compliance and registration

What is the registration threshold? 
Currently 10-tonnes per annum – this is calculated on a rolling basis from 1 April 2022. 

How are PPT returns submitted?
The return needs to be submitted via a government gateway account, in a similar way to VAT returns. 

What is the rate of tax for PPT?
The purpose of PPT appears to be focussed more on changing behaviour than collecting revenue. The current rate of tax is £210.83 per metric tonne, this was increased from £200 on 1 April 2023.
What items need to be included when calculating the registration threshold?

The weight of all taxable packaging imported or manufactured in the UK needs to be included. In addition, any items falling under the medical exemption need to be included when calculating whether the threshold has been breached. 

If you are an organisation with multiple cost-centre divisions, does the 10-tonne requirement apply to each division or the group as a whole?

The 10-tonne threshold applies to each legal entity.

2: Scope of PPT

Who is liable to pay PPT?
Any UK manufacturer or processor will be liable to pay PPT when a chargeable plastic packing component is finished.

Anyone importing plastic packaging components will be required to pay PPT (including NHS Trusts). The person importing the plastic will be the named importer of the goods on the customs declaration. 

What about items of packaging that are mixed? For example, paper and plastic or metal and plastic. Would the tax apply to only the plastic part of the packaging?

If the packaging meets the definition of plastic, the whole product will be subject to PPT. If the packaging does not meet the definition of plastic, then none of it will be subject to PPT. You will need to work out whether is the heaviest component within the packaging by weight.

Is the tax just on imports outside of the UK or does it include UK to UK supplies?
The tax is charged on any plastic packaging imported into the UK or manufactured in the UK. PPT is due at the time the plastic is imported, or the manufacturing process has finished. 

3: Medical exemption

The PPT guidance mentions an exemption for medical packaging – does this cover all medical products?
The exemption only extends to immediate packaging for licence human medicine. It does not include packaging for medical devices. The definition of a human medicine for PPT purposes is that in the Human Medicines Regulations 2012, Part A, Regulation 2.

The medical exemption is only for the immediate packaging of licenced human medicine – what does immediate packaging mean?
Immediate packaging is a container (or other form of packaging) that is immediately in contact with a product when it is produced. Other packaging outside the immediate packaging would not fall under the exemption. 

Do you have to report exempt medical packaging on the PPT return?
Yes – although it is exempt from the charge to PPT, it still must be reported on the PPT return and counts towards the 10-tonne registration threshold. 

4: Transport exemption

Is pallet wrap that is used to transport pallets of products exempt from PPT?
If the pallet wrap is being used as tertiary packaging to secure the goods on transit to the UK it will be exempt. If the pallet wrap is not being used as tertiary packaging or is being used to transport goods within the UK, it will be taxable.

How can 91̽»¨help?

If your NHS organisation would like support with plastic packaging tax, please contact Jamie Jarrett or Scott Harwood.