HMRC data show a fall in taxable plastic packaging and a rise in packaging containing at least 30% recycled plastic since the UK Plastic Packaging Tax (PPT) was introduced in April 2022. But the figures do not show how much of that change can be attributed to the tax.
The latest figures provide a mixed picture as PPT enters its fifth year. Total plastic packaging declared by UK manufacturers and importers has fallen, while the amount meeting the 30% recycled-content threshold has increased.
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At the same time, the tax is evolving. New rules taking effect in April 2027 will allow chemically recycled plastic to count towards the threshold under a mass-balance system, subject to certification and supply-chain controls.
Plastic Packaging Tax at a glance
PPT came into force on 1 April 2022. It was designed to encourage manufacturers and importers to use more recycled plastic in packaging by creating a financial incentive to reach a minimum recycled-content level.
The tax applies to relevant finished plastic packaging components containing less than 30% recycled plastic. Businesses that manufacture or import 10 tonnes or more of finished plastic packaging components within the relevant period generally need to register with HMRC, even if their packaging contains 30% or more recycled plastic and no tax is due.
The rate was £200 per tonne when PPT launched. It increased to £223.69 per tonne in 2025–26 and is £228.82 per tonne from 1 April 2026. HMRC had 5,142 businesses registered for PPT as of 13 August 2026.
The policy objective is broader than reducing the amount of taxable packaging. HMRC says PPT is intended to increase demand for recycled plastic, which should in turn support higher levels of plastic recycling and collection and reduce the amount of plastic sent to landfill or incineration.
Less plastic packaging is taxable
The latest HMRC statistics show a clear fall in the amount of plastic packaging declared as taxable.
In 2022–23, the first full financial year of PPT, UK manufacturers and importers declared 3.433 million tonnes of plastic packaging. Of this, 1.399 million tonnes was taxable.
By 2025–26, total declared packaging had fallen to 2.970 million tonnes, while taxable packaging had dropped to 1.107 million tonnes.
That means total declared plastic packaging fell by about 13% between 2022–23 and 2025–26. Taxable packaging fell by about 21%.
As a result, the taxable share declined from 41% of declared packaging in 2022–23 to 37% in 2025–26.
The direction of travel is consistent with one of PPT’s main aims. But the figures alone cannot establish why taxable packaging has fallen.
Changes in recycled content are one possible factor. Others could include changes in packaging volumes, product design, materials, manufacturing and supply chains.
This distinction matters when assessing whether the tax is working. A change that occurs after PPT is introduced is not necessarily a change caused by PPT.
More packaging meets the recycled-content threshold
HMRC data also show an increase in the amount of packaging reported as containing at least 30% recycled plastic.
The figure rose from 1.290 million tonnes in 2022–23 to 1.506 million tonnes in 2025–26, an increase of about 17%. It reached 1.569 million tonnes in 2024–25 before falling slightly in the latest year.
The latest data show that 63% of declared plastic packaging was not taxable in 2025–26. Within that non-taxable total, 51% met the 30% recycled-content threshold. Other packaging was exported, intended for export or converted, while less than 1% was exempt because it was used for the immediate packaging of human medicines.
The increase in packaging meeting the recycled-content threshold is therefore another indicator moving in the direction intended by PPT.
It does not, however, provide a measure of the tax’s direct impact.
Falling tax revenue is not the main test
PPT generated £250m in accrued revenue in 2025–26, down 4% from £261m in 2024–25.
A fall in revenue might appear to suggest that the tax is becoming less significant. But revenue is not the main policy objective.
If more packaging moves above the 30% recycled-content threshold, the amount subject to tax should fall, all else being equal. Revenue can therefore decline while the tax is having an effect that is consistent with its stated purpose.
Revenue also depends on the overall volume of taxable packaging and the tax rate. It is therefore not, on its own, a useful measure of whether PPT is achieving its environmental objectives.
The difficult question: what would have happened without PPT?
This is the central challenge in assessing the tax.
HMRC’s own evaluation plan recognises the difficulty of separating the effect of PPT from other factors. It says the evaluation will consider the counterfactual — what would have happened if PPT had not been introduced — and use different methods to assess the contribution made by the tax.
The wider UK packaging policy landscape has also changed since 2022. PPT sits alongside measures including packaging Extended Producer Responsibility and changes to recycling collections.
Consumer attitudes, packaging technology, recycled-plastic availability and wider corporate sustainability commitments can also affect decisions about packaging materials.
HMRC plans to use tax administration data, business surveys and external research involving businesses, industry experts, waste management companies and reprocessors to assess the tax’s impact.
The available statistics therefore support a cautious conclusion: several indicators have moved in the direction intended by PPT, but they do not yet establish how much of that movement was caused by the tax.
What PPT means for packaging companies
For packaging manufacturers, importers and their customers, PPT creates an ongoing need to understand the recycled content of packaging components and maintain evidence to support tax treatment.
This is becoming more important as the rules develop.
The tax is not simply concerned with how much plastic a packaging component contains. Businesses must also be able to demonstrate the recycled content they claim and determine whether the packaging falls within the relevant tax rules.
That puts greater emphasis on material data, supplier information and record keeping across packaging supply chains.
PPT rules are changing in 2027
From 1 April 2027, businesses will be able to use a mass-balance approach to account for chemically recycled plastic in their PPT returns. The approach is optional, but businesses that do not use it will have to treat chemically recycled plastic as non-recycled plastic for PPT purposes.
The mass-balance system is designed for situations where chemically recycled and virgin materials are physically mixed during production. It allows recycled content to be attributed to specific packaging outputs even when the recycled material cannot be physically identified in those outputs.
HMRC published minimum certification requirements in August 2026. These cover the supply chain from chemical recycling through to the manufacture of the plastic packaging component. Businesses using the approach must work within a certification scheme that meets HMRC’s requirements.
The rules include a site-level mass-balance system, three-month accounting periods, controls to prevent a negative balance, site-specific conversion factors and six-year record keeping. Businesses must also retain valid certificates and attribution declarations.
The new system places particular emphasis on traceability. Each business in the relevant supply chain must be certified, with a new attribution declaration accompanying each batch of attributed recycled material when it moves between businesses. Companies receiving packaging must check their supplier’s certification and the validity of the relevant declaration.
Importers of finished packaging produced using mass balance do not themselves need to be certified. They must, however, ensure the relevant supply chain is certified and retain evidence from their supplier.
From the same date, pre-consumer plastic waste will no longer qualify as a source of recycled content for PPT.
For packaging companies, the changes therefore go beyond bringing chemically recycled plastic into the PPT framework. They introduce new requirements around certification, mass-balance accounting, supplier due diligence, batch-level documentation and record keeping.
So, is the UK Plastic Packaging Tax working?
The available data show that the amount of taxable plastic packaging has fallen, while the amount reported as containing at least 30% recycled plastic has increased since PPT was introduced.
Those trends are consistent with the tax’s stated objectives. But they do not prove that PPT caused the changes.
The stronger test will be whether increased use of recycled plastic can be sustained and whether the tax contributes to higher levels of recycling and collection over time.
The 2027 changes will add another dimension to that assessment. By allowing chemically recycled plastic to count through a controlled mass-balance system, the tax will cover a wider range of recycling technologies while placing greater emphasis on certification and supply-chain evidence.
HMRC says it will publish more detailed guidance on the mass-balance system in early 2027, ahead of the April implementation date.
