Plastic Packaging Tax UK 2025–2027, Retail & Supply Chain Guidance
The UK’s Plastic Packaging Tax (PPT) was introduced in April 2022 to encourage businesses to reduce their use of virgin plastic and increase the use of recycled materials in packaging.
Since its introduction, the tax has continued to evolve alongside wider UK legislation on waste reduction, recycled content, and supply chain transparency. Rates increased again in April 2025, with further inflation-linked increases confirmed for future years.
While many retailers are not directly liable for the Plastic Packaging Tax, the financial, operational, and compliance impacts are often passed up the supply chain. As a result, having clear visibility of packaging materials, recycled content, and supplier data is increasingly critical.
In this article, we explore the most common questions businesses are asking about the Plastic Packaging Tax and explain how improved supply chain visibility can support compliance and help reduce tax exposure.
What is the Plastic Packaging Tax and Why Was it Introduced?
The Plastic Packaging Tax (PPT) is a UK environmental regulation designed to encourage the use of recycled plastic and reduce reliance on virgin materials. The tax applies to certain plastic packaging manufactured in, or imported into, the UK that contains less than 30% recycled plastic.
Growing public awareness of plastic pollution, influenced by documentaries such as Blue Planet, has helped drive support for policies aimed at reducing plastic waste. According to Greenpeace, only around 17% of plastic was recycled in the UK in 2024, highlighting the scale of the challenge.
Critics of the tax argue that it risks becoming a revenue-raising mechanism unless matched by sustained investment in domestic recycling infrastructure. HMRC collected £259 million in Plastic Packaging Tax receipts in 2024/25, a slight decline on the previous year. While this may reflect increased recycled content in some packaging, significant volumes of virgin plastic are still in use, and the UK plastics recycling sector continues to face structural pressures.
What Is the Current Plastic Packaging Tax Rate?
The current Plastic Packaging Tax rate came into effect on 1 April 2025 and is £223.69 per tonne. This represents a steady increase from the original £200 per tonne set when the tax was introduced in 2022.
The Autumn Budget confirmed a further increase in line with inflation, with the rate rising to £228.82 per tonne from 1 April 2026. This rate will apply to plastic packaging manufactured in, or imported into, the UK.
Upcoming Plastic Packaging Tax Rule Changes (2026–2027)
In addition to annual rate increases, significant rule changes are due to take effect from 1 April 2027, which will have a material impact on sourcing, reporting, and compliance.
Mass Balance Approach approved
Legislation is expected to formally recognise the Mass Balance Approach for Plastic Packaging Tax purposes. This will allow chemically recycled plastic to count towards the 30% recycled content threshold, provided it is properly verified. For some packaging formats, this may make sourcing compliant materials more achievable.
Pre-consumer waste excluded
From April 2027, pre-consumer (post-industrial) plastic waste will no longer count towards the recycled content threshold. Manufacturing offcuts, rejects, and trims will therefore be excluded, closing a perceived loophole and refocusing the tax on end-of-life consumer waste.
Certification consultation
The UK Government has also confirmed plans to consult in early 2026 on introducing mandatory certification for mechanically recycled plastic, as part of the exemption claim process for PPT.
Who Does the Plastic Packaging Tax Apply To in the UK?
The Plastic Packaging Tax applies to businesses that manufacture or import 10 tonnes or more of finished plastic packaging components within a rolling 12-month period.
This includes:
- UK manufacturers of plastic packaging
- Businesses importing packaging into the UK, whether filled or unfilled
Registration is completed via HMRC using a Government Gateway account. Businesses must submit quarterly returns and retain detailed records covering packaging weights, recycled content, and supply chain documentation.
What Records Must Businesses Keep to Stay Compliant?
Effective record-keeping is central to PPT compliance and relies heavily on supply chain transparency.
Required records include:
- Packaging material breakdowns
- Evidence of recycled content
- Supplier certifications and declarations
- Weight calculations
- Import and export documentation
Without consistent and reliable supplier data, meeting these requirements can become time-consuming and high-risk. Segura’s supply chain software can help businesses capture all the information required to submit to the HMRC.
What If My Supplier Cannot provide the Required Information?
If suppliers fail to provide accurate or timely documentation, HMRC may still hold the liable business responsible. As the tax has been in place since 2022, suppliers should now expect requests for recycled content evidence and traceability information.
Best practice includes:
- Requesting certificates of conformity
- Using written agreements
- Implementing supplier scorecards
- Switching to suppliers with strong traceability practices
How Does the Plastic Packaging Tax Affect the Supply Chain?
The Plastic Packaging Tax encourages businesses to rethink their packaging supply chains, driving demand for verified recycled materials, improved traceability, and stronger supplier partnerships.
Poor-quality data or missing documentation can delay reporting, increase compliance risk, and lead to unnecessary tax exposure.
What is the Mass Balanced Approach due to come in from April 2027?
The Mass Balance Approach is an accounting method that allows recycled plastic content to be attributed to a final product even when recycled and virgin materials are physically mixed during production.
For retailers, this is positive news. It provides packaging manufacturers with greater flexibility to demonstrate recycled content and may reduce the volume of packaging subject to tax.
How does it work?
Chemical recycling breaks down hard-to-recycle plastics into feedstock, which is then reintroduced into polymer production systems. Once mixed, recycled and virgin materials cannot be physically separated.
The Mass Balance Approach allows businesses to track total recycled input and allocate it proportionally across outputs over a defined period. To ensure integrity and avoid double-counting, recycled content must be verified through third-party certification schemes such as ISCC PLUS.
The government's decision to adopt this approach from 1st April 2027 provides a pathway for those using advanced plastic packaging materials to achieve PPT compliance.
What Is the Impact of Removing Pre-Consumer Waste?
From April 2027, excluding pre-consumer waste from recycled content calculations will likely increase tax exposure for businesses that currently rely on post-industrial waste to meet the 30% threshold.
Unless the proportion of post-consumer recycled plastic increases, retailers may see higher PPT liabilities passed through the supply chain.
What Packaging Is Exempt from PPT?
Exemptions include:
- Packaging where plastic is integral to product function (e.g. inhalers, printer toners)
- Transit packaging for exported goods
- Plastic designed for permanent non-packaging use
- Certain medical packaging
- Long-term storage products such as toolboxes or DVD cases
Bioplastics are not exempt and are subject to PPT if they contain less than 30% recycled plastic.
Plastic Packaging Tax - Solutions
How Can Businesses Reduce Their Plastic Packaging Tax?
Businesses can reduce or avoid PPT exposure by:
- Using packaging with at least 30% recycled content
- Switching to alternative materials, such as cardboard or plant-based solutions
- Improving ethical sourcing through greater supplier transparency
- Redesigning packaging to reduce plastic weight and complexity
- Reducing home delivery packaging, for example, through in-store collection incentives
How Can Segura Help?
Plastic Packaging Tax compliance ultimately relies on supplier declarations and verifiable data. Segura helps retailers gain visibility across their packaging supply chains, capturing the evidence needed to support PPT reporting and broader regulatory compliance.
Using Segura, businesses can:
- Map packaging suppliers and material sources
- Capture recycled content data and certifications
- Onboard suppliers using structured questionnaires
- Generate reports aligned with HMRC requirements
By centralising supply chain data, retailers can reduce risk, improve efficiency, and prepare for future regulatory change.
Segura can help you prepare the reports on plastic percentages you need, according to the data captured from your suppliers. For more information, please get in touch, and we'll help answer your questions.
About Segura
Segura is the leading fashion supply chain traceability solution, empowering fashion retailers and brands to deliver ethical, sustainable and efficient multi-tier supply chains.
Segura provides n-tier mapping, transparency, traceability, visualisation, compliance and reporting. Segura sits in the centre of your supply chain management structure, creating a central repository for all your supply chain, ESG-related data and evidence, including from third-party data sources.
With all supply chain traceability data stored on a single platform, our customers get the right evidence in the right place to back up claims and meet regulatory compliance.
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