Rate change from 1 April 2023 for Plastic Packaging Tax
Published 15 March 2023
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Who is likely to be affected
UK manufacturers of plastic packaging, importers of plastic packaging, business customers of manufacturers and importers of plastic packaging, and consumers who buy plastic packaging or goods in plastic packaging in the UK.
To mitigate against disproportionate administrative burdens in comparison to the tax liability for those who are likely affected, there is an exemption for manufacturers and importers of less than 10 tonnes of plastic packaging per year.
General description of the measure
As announced at Spring Budget 2023, the rate of Plastic Packaging Tax will increase from 1 April 2023 in line with the Consumer Price Index (CPI).
Policy objective
The aim of the tax is to provide a clear economic incentive for businesses to use recycled plastic in the manufacture of plastic packaging, which will create greater demand for this material. In turn this will stimulate increased levels of recycling and collection of plastic waste, diverting it away from landfill or incineration. Increasing the rate of Plastic Packaging Tax in line with CPI maintains the real terms value of the price incentive to use recycled plastic and supports the government’s environmental goals.
Background to the measure
Plastic Packaging Tax was introduced on 1 April 2022 as a part of the government’s Resources and Waste Strategy. Plastic Packaging Tax encourages the use of recycled plastic in packaging and to divert plastic away from incineration or landfill. Alongside other measures, Plastic Packaging Tax supports the government’s ambition to eliminate avoidable plastic waste by 2042.
Detailed proposal
Operative date
The new rate will apply to all plastic packaging manufactured in the UK or imported into the UK on or after 1 April 2023.
Current law
Section 45 of the Finance Act 2021 sets out the rate of Plastic Packaging Tax.
Proposed revisions
The rate as set out in section 45 of the Finance Act 2021 will be amended from £200 per tonne to £210.82 per tonne with effect from 1 April 2023.
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 economic 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 impact individuals unless businesses pass on the charge. It is expected that even if all the tax is passed on to individual consumers, the cost to consumers will be small as plastic packaging usually makes up a very small amount of the total cost of goods. On this basis we expect customer experience to stay broadly the same. There is not expected to be any 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. The measure is expected to have a negligible impact on the registered population of manufacturers and importers of plastic packaging. One-off costs will include familiarisation with the rate increase. There are not expected to be any continuing costs.
This measure is expected overall to have no impact on the business experience of dealing with HMRC as the change is the expected annual uprating of Plastic Packaging Tax and doesn’t change any processes or tax administration obligations.
This measure is not expected to have any impact on civil society organisations.
Operational impact (£m) (HMRC or other)
The changes introduced by this measure will not impact the costs previously outlined.
Other impacts
Uprating Plastic Packaging Tax by CPI maintains the real terms value of the incentive to include 30% or more recycled plastic in plastic packaging components.
The changes made by this measure do not change the Justice Impact Test previously completed and published here.
Other impacts have been considered and none have been identified.
Monitoring and evaluation
The measure will be monitored through information collected from tax returns and receipts.
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.