New rules for Plastic Packaging Tax from April 2027 will change how businesses account for recycled plastic. The changes take effect on 1 April 2027. Firstly, they change how businesses treat chemically recycled plastic. Secondly, they remove pre-consumer plastic waste as an eligible source of recycled content. As a result, many manufacturers and importers will need to rethink their approach to Plastic Packaging Tax (PPT).
Introducing the mass balance approach
Under the new rules, manufacturers and importers can use a mass balance approach. This lets them attribute chemically recycled plastic to packaging components. In practice, many manufacturing processes mix recycled and virgin materials together. The mass balance approach allows businesses to calculate and allocate recycled content through that process. Consequently, businesses gain a clearer way to recognise chemically recycled plastic in their packaging.
Is the mass balance approach compulsory?
No, the mass balance approach will be optional. However, businesses that choose not to use it face a clear consequence. They must treat chemically recycled plastic as non-recycled (virgin) plastic. This applies when they calculate recycled content for PPT purposes. Therefore, opting out could make it harder for some packaging to reach the exemption threshold.
Certification and record-keeping requirements
To qualify, a compliant third-party certification scheme must cover the supply chain. Businesses will also need to take several practical steps. Specifically, they will need to:
- check their suppliers’ certification
- keep relevant certificates and attribution declarations
- retain supporting records for six years
Without these records, businesses may struggle to support their recycled content claims.
The 30% exemption still applies
Importantly, the 30% exemption remains in place. Plastic packaging containing at least 30% qualifying recycled plastic stays exempt from PPT. Nevertheless, this packaging still counts towards the 10-tonne registration threshold. Businesses should therefore continue to monitor their total packaging volumes.
Preparing for the new rules for Plastic Packaging Tax from April 2027
With the changes on the horizon, businesses should act early. First, they should review their supply chains. Next, they should check their record-keeping procedures. Finally, they should assess the packaging materials they currently use. In particular, businesses relying on pre-consumer waste should look at other sources of recycled content. That way, they can stay compliant and avoid unexpected tax costs.
Need help preparing for the new rules for Plastic Packaging Tax from April 2027?
Our tax specialists can review your packaging, supply chain and records ahead of the changes. Get in touch with our team today to find out how the new rules will affect your business.
