Plastic Packaging Tax: New Rates from April 2026

Plastic Packaging Tax (PPT) was introduced in April 2022 to create an economic incentive for businesses to use recycled plastic in packaging and reduce reliance on virgin materials. Since then, the rate of tax and reporting requirements have changed annually as part of wider environmental tax policy. With new rate changes coming into effect on 1 April 2026, now is an important time for businesses to review their obligations and compliance processes.

New rate from 1 April 2026

From 1 April 2026, the rate of Plastic Packaging Tax will increase to £228.82 per tonne for plastic packaging components that contain less than 30 percent recycled plastic by weight. This is up from the current rate of £223.69 per tonne that applies from April 2025.

This inflation-linked change reflects the government’s intention to maintain the tax incentive for recycled content in packaging and ensure that the tax continues to support more sustainable material choices.

Registration threshold remains the same

The threshold for registration has not changed. A business must register for Plastic Packaging Tax if it manufactures or imports 10 tonnes or more of finished plastic packaging components in a 12-month rolling period, regardless of whether the packaging contains at least 30 percent recycled plastic.

It is important to note that registration is required even if no tax is due because all packaging components are above the recycled content threshold. The obligation to register is based on volume, not on whether tax is ultimately payable.

What counts as taxable packaging?

PPT applies when plastic packaging components that contain less than 30 percent recycled plastic are manufactured in the UK or imported into the UK. Businesses need to weigh all finished plastic packaging components and assess the recycled content percentage to determine if PPT applies.

Even packaging that is part of a finished product is included in the calculation. If the packaging contains multiple components, the predominant material by weight determines whether the item is treated as plastic for tax purposes.

Practical implications for businesses

The forthcoming rate increase and existing registration rules may have several commercial and operational implications:

• Increased cost pressure on non-recycled packaging: The higher rate from April 2026 means stronger financial incentives to use recycled content or alternative materials where feasible.
• Ongoing monitoring of volumes: The rolling 12-month registration threshold requires continuous tracking of packaging volumes to identify when you exceed the 10-tonne threshold.
• Compliance and reporting: Registered businesses must submit quarterly returns to HMRC and maintain accurate records of packaging weights and recycled content evidence.
• Supplier and customer negotiations: Higher rates may prompt discussions with packaging suppliers or customers about material choices and cost sharing.

Ensuring that internal systems are capable of calculating PPT liabilities accurately remains important, particularly where multiple packaging types or product lines are involved.

Planning for the future

While the 2026 rate change may represent only a modest increase, it is consistent with the long-term trajectory of Plastic Packaging Tax and broader environmental policy goals. Businesses should use this point to reassess packaging strategies, monitor evolving regulations, and consider the potential impact of future reforms, such as changes to what counts as recycled content or certification requirements.

If you would like tailored advice on PPT compliance, including how the new rate affects your tax exposure or whether you need to register, the Rödl UK team is available to help.