Get tax relief on exported and converted components for Plastic Packaging Tax
You can get relief on exported and converted packaging in the same accounting period or claim a credit for them on a later tax return.
When you can get relief
You may be able to get tax relief if you manufacture or import finished plastic packaging components and you:
- export them in the same accounting period
- intend to export them in the next 12 months
- have paid tax on them but later export them or convert them into different chargeable plastic packaging components
- have evidence another business has exported or converted them
You must be registered for the tax to get relief.
How to get relief
You can tell HMRC about exported and converted components by including their weights on your tax return.
There are different rules depending on:
- what you want to get relief for
- when you want to claim
Components you export in the same accounting period
You can get relief on packaging components you export in the same accounting period you manufactured or imported them.
You must include the components in your return for the accounting period where the tax is due. Any tax due is taken off your total bill for the period before you submit your return.
You must have evidence that the export has taken place.
If you intend to export components in the next 12 months
You can ‘defer’ paying tax if you intend to export any components you’ve manufactured or imported in the next 12 months.
You must include the components in your return for the accounting period where the manufacture or import took place. Any tax due is taken off your total bill for the period before you submit your return.
You must have:
- intended to export them before you manufacture or import them
- records to show your intention to export
Your liability for the tax is cancelled when you:
- export the packaging components within 12 months
- hold records to show the export has taken place
If you no longer intend to export or the components are not exported within 12 months
You must include the components on your next return when you’re asked about how much packaging you manufactured or imported in that accounting period. If the components are taxable, for example because they do not contain 30% or more recycled plastic, you will need to pay tax on them. If the tax rate has changed you will need to pay tax at the new rate.
Example of what you should do when components are not exported within 12 months
Your business manufactures finished plastic packaging components on 23 August 2022. You intend to export the finished plastic packaging components yourself within the next 12 months.
You account for the finished plastic packaging components on your July to September 2022 quarterly tax return as being intended for export by you.
No tax was paid as your business intended to export the packaging.
By 23 August 2023 the export has not taken place. This means Plastic Packaging Tax must be paid, as the finished plastic packaging components have not been exported by you within 12 months.
Plastic Packaging Tax must be accounted for and paid on your business’s next tax return. This will be your July to September 2023 return at the tax rate from 1 April 2023.
If another business exports or converts your components in the same accounting period
You will need to give details on your return about the weight of any finished plastic packaging components you have manufactured or imported, if another business has either:
- converted them into new components in the same accounting period you manufactured or imported them
- exported them in the same accounting period you manufactured or imported them
You must keep records of the relevant plastic packaging components as well as the export and conversion.
Any tax due is taken off your total bill for the period before you submit your return.
If you’ve already paid the tax on the components, you can claim a credit on a later return after you have received the evidence of export or conversion.
Components you’ve already paid tax on which are exported or converted
You can claim tax back as a credit on your return if you’ve paid tax on components that are:
- later exported by you or another business
- converted into different chargeable plastic packaging components
You can only claim when you have evidence to show the export or conversion has taken place, and on the return when you have received it.
The credit must be claimed within 2 years of the components being either manufactured or imported.
Credits are taken off the total amount of Plastic Packaging Tax you owe. They will show in your account after you submit your return.
Isle of Man and Channel Islands
You can claim a credit if you have exported plastic packaging components to the Channel Islands and outside of the UK from the Isle of Man.
Example of claiming a credit for components later exported by another business
Your business accounts for 20 tonnes of finished plastic packaging components on your January to March 2023 quarterly return.
You paid the £4,000 tax due in April 2023.
In May 2023, a business customer provides evidence that they exported 5 tonnes of the finished plastic packaging components they bought from you.
As your business paid the Plastic Packaging Tax on these components, you are allowed to claim a credit for the 5 tonnes (5 tonnes × £200 = £1,000) on your next return.
Your Plastic Packaging Tax liability in the next accounting period is 30 tonnes.
You are allowed to reduce this liability by claiming the credit on your April to June 2023 quarterly return. To claim the credit, you should enter 5,000kg for the finished plastic packaging components you are claiming a credit for on your return.
Example of claiming a credit when components are later converted by another business
Your business accounts for 30 tonnes of finished plastic packaging components manufactured on your April to June 2023 quarterly return.
You paid the £6,324.60 tax due in July 2023.
You then supply 10 tonnes of the finished plastic packaging components to another business.
The other business uses the finished plastic packaging components to manufacture new finished plastic packaging components, which are also subject to Plastic Packaging Tax.
Once you receive evidence confirming the original components have been converted into a different finished plastic packaging component, you are allowed to claim a credit for the 10 tonnes (10 tonnes × £210.82 = £2,108.20) on your next return.
To claim the credit, you should enter 10,000kg for the finished plastic packaging components you are claiming a credit for on your return.
Keeping records
Make sure you keep the right records for any export or conversion you want to get relief on.
Updates to this page
Last updated 18 August 2023 + show all updates
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Additional guidance to confirm the tax rates to pay when components are not exported within 12 months added.
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Guidance has been updated about when you can claim tax back as a credit on your return, if you’ve paid tax on components. The example of claiming a credit when components are later converted by another business has been updated to reflect the new rate of tax as of 1 April 2023.
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Guidance has been added on how to complete your return if another business exports or converts your components in the same accounting period.
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The section 'Components you’ve already paid tax on which are exported or converted' has been updated, to explain that you can claim tax back as a credit if you have exported plastic packaging components to the Channel Islands and outside of the UK from the Isle of Man.
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New guidance on how you can get tax relief on exported and converted packaging in the same accounting period or claim a credit for them on a later tax return.
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The examples in the 'When you can claim a credit' section have been updated.
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Added translation
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Examples showing how to claim a credit and defer a payment have been added.
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You cannot claim relief for transport packaging used to export goods from the UK.
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Added translation
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First published.