HMRC finally make a decision on Plastic Packaging Tax invoicing requirements!
Since the introduction of the Plastic Packaging Tax (PPT), back in April 2022, the online guidance has continued to state “The requirement to include a statement with your invoice to show that Plastic Packaging Tax has been paid, which was due to commence in April 2022, has been delayed”.
The requirement to confirm the applicable Plastic Packaging Tax on the sale has, based on feedback from clients, not been a major issue. Moreover, it was the requirement to state the exact tax against each product which was causing more concerns as it meant a change to existing invoicing software to supply such information.
On 2 February 2023, HMRC confirmed that this requirement will no longer be introduced and the guidance has been updated with the following statement: “The requirement to include a statement with your invoice to show that Plastic Packaging Tax has been paid will no longer be introduced as a mandatory requirement.”
While no longer mandatory, the guidance does encourage those responsible for accounting for the tax, to make the Plastic Packaging Tax paid visible to their business customers, and to work with them to try and increase the amount of recycled plastic they use wherever possible.
Charging VAT
If you pay Plastic Packaging Tax on plastic packaging components that you have manufactured or imported, you can choose to increase the price you charge for that packaging to help cover the cost of the tax.
PPT is only paid once when the packaging component is finished or imported. It is not passed down the supply chain as a separately identifiable charge like VAT.
VAT will continue to be payable on the whole price charged for the goods you sell according to VAT rules.
If you increase your price of your plastic packaging because of Plastic Packaging Tax, VAT will be payable on the whole of the new price.
Find out more
We hope you find this insight useful and informative. If you have any questions or would like guidance related to your individual circumstances, please get in touch
