HMRC collects £41m more than forecast from plastics tax

The tax was introduced in April 2022 and saw a £200 per tonne levy placed on plastic packaging with less than 30% recycled content.

At the time, the Treasury predicted that it would receive £235 million in the first two years of operation, before falling to £210 million by the end of 2026.

However, the data shows that £276 million was in fact generated in the period (1 April 2022- 31 March 2023) from the 4,142 businesses registered.

Other statistics released by HMRC today show that of the total plastic packaging manufactured in and imported into the UK 39% was declared as taxable under the PPT.

Of the total plastic packaging declared 52% was manufactured in the UK and 48% was imported into the UK.

The tax was raised to £210.82 per tonne as of 1 April 2023.

Sources

The data used to compile the PPT statistics come from two sources:

• Cash receipts and returns data are taken from the Enterprise Tax Management Platform (ETMP)
• Tonnage declaration and liabilities data is taken from information provided by traders on the PPT return form

Ringfenced

The data will undoubtedly lead to increased pressure from the sector to ensure the money raised is ringfenced for improvements to recycling.

HMRC has long-stated that taxes are not ringfenced to allow government the “flexibility” it needs, this spreads to all taxes such as road tax. However, there have been some calls to ringfence the “extra” funds forecasted.

This question was put to Mark Palmer, senior policy advisory at HMRC, by RECOUP’s Stuart Foster at INCPEN’s plastics conference last month.

When asked if it was possible to ringfence extra funds generated for the industry, Mr Palmer said: ” This is an interesting idea. All I can really say is that it is a political question for Treasury. From an HMRC point of view our responsibility is collecting the tax, how the money is used is beyond our view.

“I do think it is an interesting an idea and I think any suggestions of that sort would be worth putting to Treasury and I would encourage people to share them. But, it is not something I can directly give any promises on.”