MHA | ESG & the impact of Plastic Packaging Tax

ESG & the impact of Plastic Packaging Tax

Alison Horner · March 25th 2024 · read

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Environmental taxes to drive the sustainability and net-zero agenda are rising at pace across the globe. Plastic production has more than doubled in the last two decades to 450 million tonnes, so it’s unsurprising that bans and taxes on single-use plastics have been introduced in more than 120 countries.

Globally, according to the OECD (Organisation for Economic Co-operation and Development) only 9% of plastic waste is ever recycled, so governments are stepping up efforts to encourage businesses to make positive changes to their production methods and supply chains to reduce plastic use.

The UK government introduced a Plastic Packaging Tax (PPT) in April 2022, followed by Spain and Italy in January 2023, with Germany introducing the tax from January 2024. Asia-Pacific regions have also stepped-up regulations on plastic use, while Canada has adopted an ambitious Zero Plastic Waste Strategy.

UK£210.82 per MT (increasing to £217.85 from 1st April 2024)
Spain€0.45 per kg on non-recycled content
Italy €0.45 per kg on non-recycled content
Germany Annual levy

The UK

In the UK between 2022-2023 a total of 4,142 businesses registered for PPT, resulting in revenue of £276m being paid over to HMRC via quarterly PPT returns, according to figures released by the treasury in August last year.

Year on year comparisons of the total quantity of plastic packaging and the revenue generated from the tax will be a useful indicator to determine if it has the desired impact, to change business attitudes to plastic packaging and to reduce the levels of virgin plastic in the supply chain.

What does PPT apply to?

PPT applies to plastic packaging manufactured in, or imported into, the UK where the plastic used in its manufacture is less than 30% recycled. It includes obvious and not so obvious items, such as shrink-wrap, plastic pallets, plastic strapping, moulded polystyrene foam, bin bags, plastic protective film (e.g. for windows) and reusable plastic crates.

Who must register and account for PPT?

Businesses that manufacture or import 10 or more metric tonnes of finished plastic packaging over a 12-month (rolling) period, are required to register for PPT. This is still required even if the packaging manufactured, or imported, contains in excess of 30% recycled plastic.

What is finished plastic packaging?

The packaging is in a format that it can be used to contain and transport goods. This may be packaging that is fully complete (e.g. plastic carton), or semi-complete packaging, such as a plastic bottle without a cap.

The goods become liable to PPT on completion of manufacture in the UK, or at time of import into UK. For the latter, the consignee named on the UK import declaration will be responsible for retaining records and registering for PPT.

Exceptions to PPT

There are 4 groups that are excepted from the tax. They are:

  • Plastic packaging used in transport to import multiple goods safely into the UK
  • Plastic packaging used in aircraft, ship and rail goods stores
  • Plastic packaging used for the immediate packaging of licensed human medicine
  • Components permanently recorded as set aside for non-packaging use


If your company is a manufacturer, filler or importer of plastic packaging in Spain, Italy or Germany you will need to understand the tax positions:

introduced a plastic packaging tax in January 2023 with a tax rate of €0.45 per kg of non-recycled plastic packaging. It is applicable on the manufacturing, importation and intra-community acquisition of non-reusable plastic packaging for its final use within the Spanish market, covering the transactions of (empty) packaging materials itself and packaged products, as well as being applicable to primary, secondary and tertiary packaging.

Companies not established in Spain are required to designate a properly accredited representative for the plastic packaging tax to act on their behalf before the Tax Administration, before engaging in any taxable activities.

also introduced a plastic packaging tax in January 2023 with a tax rate of €0.45 per kg of non-recycled plastic packaging. It is applicable to single-use plastic products (so-called MACSI) composed totally or partially of organic polymers of synthetic origin which have (or are meant to have) the function of containment, protection, manipulation or delivery of goods or foodstuffs, not designed to be used repeatedly.

For MACSI coming from non-EU countries, the tax is assessed and collected at the time of importation directly by the Italian customs authorities, who are also in charge of any audit activities for all the other MACSI subject to plastic tax.
Companies not established in Italy are required to appoint a tax representative who will have joint and several liability with the same.

have implemented a Single-Use Plastics levy (known as the Single-Use Plastics Fund Act or "EWKFondsG") from 1st January 2024. From 2024, companies must be able to identify and report the extent to which they are subject to the tax. Reporting will be annually to the Federal Environment Agency (UBA) and cover all single-use plastic products made available or sold on the German market for the first time in the preceding calendar year.

For companies not established in Germany, the legislation requires that an authorised representative be employed to fulfil the reporting obligations, so it is important for those businesses to review the impact of the new tax and ensure it has the correct representation in place.

Within the legislation the definition for a ‘single-use plastic product’ is “a product made entirely or partly of plastic that is not designed, developed and placed on the market to undergo several product cycles during its lifetime by being returned to a manufacturer or distributor for refilling or reused for the same purpose for which it was manufactured”.

Although the first annual report will not be due until 2025, impacted companies must begin to review their internal processes for recording and reporting the required data to the UBA. Failure to do so could render the company subject to penalties of up to €100,000.


A patchwork of differing regulations across the globe adds considerable complexity for multinational businesses to ensure compliance. It is therefore crucial to keep this issue under review. HMRC expects businesses will conduct, as a minimum, annual checks on their suppliers to ensure that their obligations are being met. Such checks could include:

  • obtaining confirmation of the tax status of plastic packaging components from your supplier
  • getting signed documents from your supplier confirming that Plastic Packaging Tax has been properly accounted for
  • checking details provided against other sources, such as supplier websites, product specifications, sales and marketing information.

Within this due diligence process, a focus on current contracts is advised as the legislation allows a review of contracts where PPT is now part of the costs incurred in a UK supply. This is an area that may not be obvious but, where large quantities of plastic packaging are used in supplies, contracts should reflect these costs and define the responsibilities of both parties to avoid any possible liabilities.

Although the current rate of tax per metric tonne, is not significant we expect that this will increase in future if behaviours in relation to the production and importation of plastic packaging do not improve in line with the Government’s expectations.

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