UK Government’s Plastic Packaging Tax: What the New Rate Means for Businesses

Earlier this year the UK Government announced an important update regarding the Plastic Packaging Tax (PPT). From 1 April 2024, the rate has increased in line with the Consumer Price Index (CPI), rising to £217.85 per tonne. This new rate applies to all plastic packaging containing less than 30% recycled plastic that is manufactured or imported into the UK.

PPT was initially introduced as part of the government’s strategy to combat plastic waste and promote recycling. The tax incentivises businesses to use more sustainable materials by imposing a financial penalty on packaging that does not meet the minimum recycled content threshold. The recent adjustment to £217.85 per tonne reflects the government’s commitment to maintaining the tax’s effectiveness in the face of economic changes.

For many businesses, this increase represents a significant cost consideration. Companies involved in manufacturing, importing, or using plastic packaging will need to assess their supply chains and potentially adjust their practices to mitigate the financial impact. Those who have already invested in using recycled materials will find themselves at an advantage, both financially and in terms of their environmental credentials.

This increase in the PPT rate demonstrates the broader push towards a circular economy. By adjusting the tax in line with CPI, the government ensures that the PPT remains a relevant and effective tool in promoting sustainable practices.

Whilst there have been some concerns about the tax not having its desired effects regarding businesses registering under the tax, in the first year PPT raised £270 million, £41 million more than the treasury predicted.

The shift in tax not only reflects economic adjustments but also reinforces the ongoing need for sustainable innovation in packaging. While the rise to £217.85 per tonne may present challenges, it also offers an opportunity for businesses to align with broader environmental goals and market trends.