Large businesses quizzed on their plastic packaging tax returns – or lack thereof

It has been two years since the plastic packaging tax (PPT) came into force, which requires manufacturers and importers of plastic packaging products to pay £217.85 per tonne on ‘chargeable plastic packaging components’ that fall within the scope of the tax. 

HMRC statistics show that PPT receipts totalled £276m from April 2022 to April 2023, but as of 8 August 2023 only 4,142 businesses were registered for the tax – less than a quarter of the estimated 20,000 businesses HMRC expected to register. 

Research carried out by HMRC prior to PPT coming into effect found that approximately six in ten businesses did not know the average proportion of recycled plastic content of the packaging they handled or the proportion of plastic with at least 30% recycled plastic content. 

With the number of businesses registered for PPT significantly less than expected and potentially limited awareness among businesses of the content of plastic packaging, HMRC now appears to be taking action. A detailed PPT questionnaire is being issued to businesses who might be subject to PPT as part of the business risk review plus (BRR+) process, which centres around HMRC’s assessment of the UK’s largest businesses and their associated tax risk.

The new PPT BRR+ questionnaire contains 29 questions, split into 4 parts, which first asks for information about the business and details of the process used to submit PPT returns. It then goes on to ask questions relating to the importing of goods, manufacturing processes and exports.  

As a relatively new tax, many businesses are still getting to grips with their PPT reporting, and often are having to use estimated figures due to the lack of available data. HMRC is clearly aware of this, as one of the questions specifically asks whether estimated figures are used, and on what basis these are calculated. 

The inclusion of PPT within the BRR+ process will likely come as a surprise to some businesses. They need to ensure they are prepared to answer these questions and can justify their reporting methods to HMRC.