Plastic Packaging Tax increase from 1 April 2025
30 Oct 2024
On 30 October, the Chancellor announced in the Budget that the rate of Plastic Packaging Tax (PPT) will increase in line with the Consumer Price Index (CPI). The new rate of PPT will be £223.69 per tonne and will apply to plastic packaging containing less than 30% recycled plastic that is manufactured and imported into the UK from 1 April 2025.
The rate has been updated on GOV.UK here: https://www.gov.uk/government/publications/autumn-budget-2024-overview-of-tax-legislation-and-rates-ootlar/annex-a-rates-and-allowances#indirect-tax
Plastic Packaging Tax: Mass Balance Approach Consultation Update
Alongside the Budget, the Government Response to the consultation on: ‘Plastic Packaging Tax - chemical recycling and adoption of a mass balance approach’ has been published. You can access the Government Response here: https://www.gov.uk/government/consultations/plastic-packaging-tax-chemical-recycling-and-adoption-of-a-mass-balance-approach
The consultation sought views on allowing a mass balance approach (MBA), the different mass balance models, and the use of certification schemes to track recycled plastic through the plastics value chain. It also considered the exemption from PPT for the immediate packaging of human medicines if a MBA is permitted, and the treatment of pre-consumer waste as recycled plastic for the purpose of the tax.
Government Response
The Government Response confirms a MBA will be allowed to account for chemically recycled plastic for the purposes of PPT from a future date to be determined.
It also confirms that at the same time the changes for MBA are introduced, pre-consumer waste will no longer be classified as recycled plastic for the purpose of PPT, closing a loophole that gives some businesses an unfair competitive advantage. The exemption for the immediate packaging of licensed human medicines will remain in place for the foreseeable future.
Next steps
You do not need to do anything at this stage. There will be further engagement with key stakeholders to develop the technical details before confirming when the changes will come into effect and will publish draft legislation for technical consultation in due course. We appreciate the many detailed responses we received to the consultation and remain committed to working with businesses to develop a workable MBA that upholds the integrity of the tax and contributes to its environmental objectives.