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December 20, 2021
2021-2277

UK issues updated guidance and regulations on Plastic Packaging Tax

The United Kingdom (UK) is introducing a new Plastic Packaging Tax (PPT) with effect from 1 April 2022. The UK tax administration, Her Majesty's Revenue and Customs (HMRC) has issued updated guidance and regulations relating to the scope and operation of the new tax.

PPT guidance: new information published

HMRC has published further updates to the main PPT guidance on GOV.UK. These updates include further information on:

  • Examples to aide understanding of what packaging is subject to the tax or not. This also reflects secondary legislation which has been refined to provide greater clarity on this aspect of the tax
  • PPT statement on invoices – clarifying this requirement has been postponed for 1 April 2022 (no future date has been provided)
  • How VAT interacts with PPT
  • Examples of applying the 10 tonnes registration threshold, direct exports, claiming tax credits and calculating whether multi-material packaging components are plastic
  • Information on the records and accounts that businesses will be required to keep to support the information submitted on returns, including examples of the types of documents that can be used as evidence for the plastic and recycled plastic content of packaging

HMRC has indicated that further updates will be added to the guidance in due course and that it will communicate when these updates are available.

PPT regulations update

HMRC has also updated two regulations relating to PPT:

Plastic Packaging Tax (Descriptions of Products) Regulations 2021

Earlier this year, HMRC ran a technical consultation on a draft version of The Plastic Packaging Tax (Descriptions of Products) Regulations 2021. These regulations remove three categories of products from the meaning of a plastic packaging component and add a new category of products. Following consultation feedback, HMRC has refined some of the legislation wording, to provide greater clarity on what plastic packaging is subject to the tax. This updated legislation was laid in the UK Parliament on 13 December 2021. The updated legislation and Explanatory Memorandum are available online at https://www.legislation.gov.uk/uksi/2021/1417/contents/made.

Plastic Packaging Tax (General) Regulations 2022

The recent technical consultation on The Plastic Packaging Tax (General) Regulations 2022, which covers the tax's administration technical details closed on 1 December 2021. HMRC is in the process of analyzing the feedback received. Once finalized, the legislation will be laid before the UK Parliament in the new year.

HMRC PPT webinar recordings

HMRC recently conducted a series of webinars on PPT. Recordings of both the "Introduction to Plastic Packaging Tax" and "Plastic Packaging Tax – Administration and technical aspects" sessions are available on GOV.UK at https://www.gov.uk/guidance/help-and-support-for-agents#plastic-packaging-tax.

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For additional information with respect to this Alert, please contact the following:

Ernst & Young LLP (United Kingdom), London

Andrew Bradford | abradford@uk.ey.com

Pranay Sofet | pranay.sofet1@uk.ey.com

 

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