Plastic Packaging Tax raises £276m in first year £41m over target


plastic bottles

Plastic Packaging Tax (PPT) receipts collected by HM Revenue and Customs (HMRC) in the financial year 2022 to 2023 totalled £276 million, £41 million over its target.

The PPT has significantly exceeded HMRC targets with the government estimating the tax would generate £235 million in its first 12 months – which was predicted earlier this year.

Statistics released yesterday by HMRC show as of 8 August 2023 there are 4,142 businesses registered to the PPT. 39% of the total plastic packaging manufactured in and imported into the UK was declared as taxable under the PPT.

Of the remaining 61% declared: 40% contained 30% or more recycled plastic, 21% was either exported, intended for export or converted, and less than 1% was exempt because it was used for the immediate packaging of human medicines.

52% of the total plastic packaging declared was manufactured in the UK and 48% was imported into the UK.

According to the statistics, plastic packaging declared as having 30% or more recycled content made up the largest proportion of the relieved and exempt plastic packaging in all financial quarters except the period of April to June 2022. During this period plastic packaging that was exported or converted made up the largest proportion.

The inaugural report on PPT shines a useful spotlight on the current state of the plastic packaging market.

The UK government recently announced its consultation on reforming the PPT to encourage investment in chemical recycling. The UK government is seeking views on whether to adopt a mass balance approach for chemically recycled plastic in the PPT.

The consultation document seeks views on allowing a mass balance approach for the allocation of chemically recycled plastic to plastic packaging and the controls and standards that would maintain the integrity of the PPT.

Steve Gough, CEO at the UK’s largest compliance scheme, Reconomy brand Valpak, commented:
“The inaugural report on PPT shines a useful spotlight on the current state of the plastic packaging market such as the extent to which plastic packaging is imported into the UK.

“The report also demonstrates the positive progress the industry has made with 40% of plastic packaging exempt from the levy because it was manufactured with over 30% recycled content.

“With over a year since the tax was introduced as well as further innovation and investment in long-term sustainable packaging solutions, we hope to see further progress over the coming years as we accelerate the transition to a circular economy.”

CIWM response to Plastic Packaging Tax statistics

Jeremy Hunt Spring Budget
Chancellor of the Exchequer Jeremy Hunt announcing the Spring Budget.

Lee Marshall, Policy and External Affairs Director, CIWM, commented: “The week’s announcement that the PPT receipts of £276 million for the 2022/23 financial year were £41 million more than originally forecasted by the Treasury strengthens CIWM’s argument that PPT funds should be ring-fenced and invested in UK infrastructure for plastic recycling.

“The government originally claimed the purpose of the tax was ‘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.’

The tax has certainly created a demand for recycled plastic content, however, this demand is not being satisfied.

“The tax has certainly created a demand for recycled plastic content, however this demand is not being satisfied and, in this respect, PPT has failed. If the tax had been entirely successful, recycled plastic would be readily available and tax receipts would be zero.

“Large-scale investment in sorting and recycling capacity in the UK is urgently required. PPT revenues could and should be reinvested to help fund this, creating high value jobs, wealth, and a reduction in plastics being sent to incineration or landfill.”

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