Plastic packaging tax receipts fall short

Introduced in 2022, the Plastic Packaging Tax (PPT) applies to UK manufacturers and importers of plastic packaging. Businesses must pay tax unless packaging contains at least 30% recycled content.

Latest HMRC figures show annual receipts of £259 million for the year to April 2025, down £9m on the previous year. Although below expectations for the Exchequer, receipts remain above the original forecast of £225m. This suggests the tax is working, despite the compliance burden it creates.

The number of businesses registered for PPT rose slightly to 4,927 by August 2025, still far fewer than HMRC expected. This shortfall indicates continuing non-compliance, with HMRC likely to pursue more penalties and enquiries.

Some positive trends are emerging. UK plastics manufacturing has reached its highest level since the tax began, signalling growth in the domestic industry. At the same time, the proportion of recycled plastic used is rising faster than overall production, reducing receipts but supporting environmental goals.

However, concerns remain around the accuracy of data and evidential standards. PPT now features in HMRC’s business risk review process for large firms, and for others, it continues to present difficulties. Many businesses overpay to avoid penalties, as calculating liabilities and evidencing recycled content is highly complex.

Three years on, PPT is driving gradual change but remains administratively heavy. Businesses importing plastic or plastic-wrapped goods should review their position carefully, as HMRC has access to import data and is expected to step up enforcement.

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