Prepare for plastic packaging tax

Having set out the framework for the new plastic packaging tax (PPT) last year HMRC has recently published a swathe of further guidance on the day-to-day practicalities of the tax to address issues businesses raised in its consultation. As with any new tax the devil is always in the detail and this article summarises some of the fundamental areas where confusion could remain.

Scope of the tax

Plastic packaging tax is an excise tax designed to incentivise the use of alternatives to virgin plastic for packaging purposes. The government envisages this will create greater demand for recycled plastic stimulating increased levels of recycling of plastic waste and diverting it away from landfill or incineration.

The framework of the tax is set out in FA 2021 s 42 et seq. Under the primary legislation HMRC is also given powers to introduce secondary legislation and...