The rollout of disposal charges under the UK’s new packaging waste regime has now reshaped financial planning for packaging producers.
Since October 2025, businesses that placed “household-type” packaging on the market during 2024 have begun receiving invoices for disposal fees — a development that has brought the theoretical obligations of EPR firmly into day-to-day financial management.
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For packaging professionals and finance teams, these charges are no longer an upcoming compliance consideration but an active cost with clear accounting implications.
The ICAEW (Institute of Chartered Accountants in England and Wales) previously issued guidance outlining how these disposal fees should be recognised in financial statements, and that guidance has now become directly relevant as producers account for the first wave of charges.
When and how liabilities arise under the new packaging disposal fees
Under the Extended Producer Responsibility for Packaging (EPR) scheme, any business qualifying as a “liable producer” must pay disposal fees based on the packaging it placed on the market in the previous calendar year.
In practice during 2025, producers saw their liability arise at the start of the “assessment year” — 1 April 2025 — even though the ultimate amount depended on packaging data submitted for 2024.
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By GlobalDataAccounting guidance under IAS 37 (and equivalent UK standards) requires companies to recognise a provision when a present obligation exists, the cost can be reliably estimated, and it is probable the expense will be incurred.
For most producers, these conditions were considered satisfied on 1 April 2025, meaning the disposal fee liability had to be recorded at that point, months before invoices were issued in October.
Financial reporting and performance effects for packaging producers
Because disposal fees are determined by packaging tonnage and material type — rather than revenue or profit — they have introduced a new operating cost in 2025 that has materially affected margins for high-volume producers.
Finance teams have had to ensure that accounting systems capture accurate data for each material category (plastic, paper/card, glass, wood, etc.) to support provision calculations and audit scrutiny.
The April recognition requirement has also influenced the presentation of 2025 results. Many companies reflected the disposal fee expense in their first-half accounts (April–September), even though cash payments only began once invoices were issued from October onward.
Businesses that initially underestimated their expected liability have, in some cases, had to revise interim results or adjust year-end disclosures.
Preparing for compliance and audit: what packaging professionals have needed to address
Throughout 2025, packaging businesses have updated internal reporting processes to track household packaging tonnage placed on the market per material type. These records have proved essential not only for regulatory submissions but also for supporting accounting judgments and provision calculations.
The invoiced amounts now being issued by the scheme administrator are based on the “base fees” set out in the regulations, which for 2025–2026 range from £192 per tonne for glass to £423 per tonne for plastic, with additional rates for paper/card, wood, steel, composites and other materials.
Auditors and finance teams have been examining whether provisions are timely and reasonable, particularly as fee structures may evolve in future years.
A potential shift to “modulated fees” — where costs vary according to recyclability — has already encouraged firms to build flexibility into accounting models and disclosures.
These accounting considerations are increasingly influencing commercial decisions, including packaging design, material selection and customer pricing strategies.
As the sector progresses through the first full cycle of disposal charges, accurate and timely accounting remains essential for understanding the financial impact of the UK’s new EPR framework — and for enabling businesses to respond strategically as the regime continues to mature.
