The Plastic Packaging Tax (General) Regulations 2022

Part 2 of the Finance Act 2021 introduced the Plastic Packaging Tax and set out its framework and key definitions. Powers are also given to make secondary legislation that further set out the scope and procedures of the tax.

Exercising the powers of the Finance Act 2021, these Regulations put forward detailed administrative requirements for the Plastic Packaging Tax, which comes into force on 1st April 2022.

A plastic packaging component becomes chargeable to the tax when it is considered ‘finished,’ i.e. a finished product that was manufactured in the United Kingdom (UK), or imported into the UK.

A plastic packaging component is classed as finished after it has completed its final substantial modification.

Definition of substantial modification
Substantial modification is the final manufacturing process that changes the features of a packaging component. These include changes of its:

• shape;
• structure;
• thickness; and
• weight.

These manufacturing processes include:

• extrusion (when raw materials are pressed through a die to form the required shape), e.g. sheets of plastic and blown film;
• moulding (when plastic is moulded into a shape), e.g. bottle lids and bottle preforms;
• layering and laminating (when 2 or more layers are bonded together), e.g. labels;
• foaming (when a sheet of plastic is shaped into packaging by being heated and shaped), e.g. pots, tubs and trays; and
• printing (when ink is applied to plastic).

The following are not considered substantial modification processes:

• blowing or forming from a pre-form;
• cutting;
• labelling; and
• sealing.

If multiple processes are carried out at the same time to finish a packaging component, and at least one is the last substantial modification process, then all other processes that are carried out at the same time would also be regarded as the substantial modification process.

If plastic packaging components are imported into the UK, and they have already undergone their final substantial modification process, they would be regarded as finished and would be chargeable to the tax.