April will see the introduction of PPT in the UK and with it, the obligation of manufacturers and importers of plastic packaging to consider whether they are required to register and account for PPT on products they make or import into the UK. There are exemptions from PPT and some products are outside the scope of the tax, but in order to establish whether an entity must contact HMRC regarding PPT, it is prudent to consider all plastic products made and imported in the first instance.
Key Features of PPT
What is the rate of PPT?
£200 per tonne of plastic packaging unless more than 30% of the plastic product is comprised of recycled plastic.
What attracts PPT?
Finished plastic packaging components which are manufactured in the UK or are imported into the UK.
Are there exemptions from PPT?
- Packaging for medicinal products
- Transport packaging for exporting and importing goods.
- Products that are designed for a use other than packaging (e.g. teaching white boards).
What are the exclusions?
- Packaging that is an integral part of the goods (e.g. teabags).
- Packaging designed for storage (e.g. toolboxes).
- Products primarily designed for re-use to present goods (e.g. retail shelf displays).
Who needs to register for PPT?
Notification is required if either:
- It is expected that more than 10 tonnes of plastic packaging (all types including exempt and excluded packaging) will be manufactured or imported in the following 30 days, or;
- More than 10 tonnes of plastic packaging (all types) has been manufactured or imported in the previous 12 months.
In our experience, far more sectors are having to consider their PPT status than early consultations into the tax identified. For peace of mind, we recommend that anyone mildly concerned about a potential PPT exposure should:
- Try to identify sources of plastic packaging they use by liaising with manufacturing, logistics and purchasing teams where possible;
- Estimate as accurately as possible the weight of plastic material that they may import into the UK from overseas suppliers and manufacturers;
- Review purchase contracts and terms of delivery from overseas suppliers to consider the potential impact of PPT if it applies;
- Consider if PPT will have an impact on income values;
- If PPT is applicable, establish suitable methods of identifying taxable products, PPT values, and PPT return calculation.
If you are in doubt about whether you have an obligation to account for PPT, we can help you to establish your PPT status through an evaluation process. If you would like to find out more about our approach and how we can assist you please contact your usual Centurion VAT advisor or through our team email below.
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