Changes to Plastic Packaging Tax late payment penalties
Published 15 March 2023
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This publication is available at https://www.gov.uk/government/publications/changes-to-late-payment-penalties-for-plastic-packaging-tax/changes-to-plastic-packaging-tax-late-payment-penalties
Who is likely to be affected
This measure will impact UK manufacturers of plastic packaging and importers of plastic packaging who are liable for Plastic Packaging Tax. It will also impact businesses who are involved in the plastic packaging supply chain if they are held secondarily liable or joint and severally liable for the tax.
General description of the measure
This measure introduces technical changes to late payment penalties in respect of Plastic Packaging Tax so all business that pay late will incur the same penalty.
Policy objective
The measure ensures all businesses liable for Plastic Packaging Tax are treated consistently in respect of penalties for late payment.
Background to the measure
Plastic Packaging Tax was introduced on 1 April 2022 to encourage the use of recycled plastic in plastic packaging and divert plastic away from incineration or landfill.
Currently, late payments in respect of Plastic Packaging Tax by liable businesses and businesses who are held secondarily liable or joint and severally liable, incur the same penalties. In contrast, late payments of assessments, for example, an assessment of unpaid tax where a business has failed to submit a return, incur different penalties.
Detailed proposal
Operative date
This measure will apply to all late payments in respect of Plastic Packaging Tax starting from the accounting period 1 April 2023.
Current law
Part 2 of Finance Act 2021 contains the primary legislation that established a Plastic Packaging Tax. Schedule 15 to the Act amends Schedule 56 to Finance Act 2009 to include Plastic Packaging Tax within the list of taxes to which late payment penalties relate.
Proposed revisions
This measure amends the late payment penalty for Plastic Packaging Tax which was included in Schedule 56 to Finance Act 2009.
This measure removes Plastic Packaging Tax from paragraph 8(1) of Schedule 56 to Finance Act 2009 and includes it in paragraph 3(1) of Schedule 56 to Finance Act 2009.
Summary of impacts
Exchequer impact (£m)
| 2022 to 2023 | 2023 to 2024 | 2024 to 2025 | 2025 to 2026 | 2026 to 2027 | 2027 to 2028 |
|---|---|---|---|---|---|
| — | Nil | Nil | Nil | Nil | Nil |
This measure is not expected to have an exchequer impact.
Economic impact
This measure is not expected to have any significant macroeconomic impacts.
Impact on individuals, households and families
Impacts from Plastic Packaging Tax have previously been published and can be found here.
This measure is not expected to have an impact on individuals as it is designed to ensure that Plastic Packing Tax works as originally intended. Individuals will not need to do anything differently compared to what they do now. This measure is not expected to impact on family formation, stability or breakdown.
Equalities impacts
It is not expected that there will be adverse effects on any group sharing protected characteristics.
Impact on business including civil society organisations
Impacts from Plastic Packaging Tax have previously been published and can be found here.
This measure is not expected to have an impact on businesses or civil society organisations as it is designed to ensure that Plastic Packing Tax works as originally intended. Businesses or civil society organisations will not need to do anything differently compared to what they do now.
This measure is not expected to increase business customer costs significantly.
Operational impact (£m) (HMRC or other)
The changes introduced by this measure will not impact the costs previously outlined.
Other impacts
The changes made by this measure do not change the Justice Impact Test previously completed and published here.
Monitoring and evaluation
This measure will be monitored through receipts and information collected, which includes applying penalties to non-compliant businesses.
Further advice
If you have any questions about this change, please contact the Plastic Packaging Tax policy team by email: indirecttaxdesign.team@hmrc.gov.uk.