The Plastic Packaging Tax (the Tax) came into force on 1 April 2022 and applies to finished plastic packaging components (PPC) produced for commercial purposes or imported into the UK that contain less than 30% recycled plastic by weight. Since our previous article and our FAQ for businesses explaining the Tax, HMRC has updated its original guidance to help businesses better understand the Tax. This comes partly because there have been fewer registrations from businesses who consider themselves liable for the Tax than HMRC had anticipated. HMRC has also published a new piece of guidance containing provisions regarding secondary liability and joint and several liability for the Tax.

  1. Updated Guidance

As part of its effort to improve clarity on the Tax, on 12 October, HMRC updated its guidance on which PPC are exempt or excluded from the Tax and when liability can be avoided or deferred via exportation of certain PPC.


The section of the guidance titled “Transport packaging on imported goods” has been updated to better explain the exemption for transport/tertiary packaging. It states that the exemption applies to items such as reusable plastic crates; boxes; pallets; mail sacks; and road, rail, ship, or air containers used for importing goods into the UK. However, it does not apply to any unfilled plastic packaging, packaging around a sales unit or number of sales units on import, or intermediate bulk containers used for bulk transportation such as flexible intermediate bulk containers.


A new section titled “Transport packaging on exported goods” has been added to clarify when liability for the Tax is cancelled, when a business can defer tax payment, and when a business can claim a tax credit. It states liability for the Tax is cancelled if you export unfilled transport packaging within 12 months and have records to prove it. Additionally, if you intend to export packaging within the next 12 months, and are a UK manufacturer of transport packaging or you import unfilled transport packaging, you can defer paying the Tax. You can also claim a credit on your tax return if you have paid the Tax on any packaging which is later exported and you have records to confirm this.

  1. New Guidance

Secondary Liability

The new guidance states that, in certain circumstances, businesses may be liable for the unpaid tax of other actors in the supply chain. It states that HMRC can issue a secondary liability assessment notice where the recipient is involved in either transporting, storing, or dealing in PPC and they either took steps along with the person with primarily liability to avoid the Tax or they “knew or should have known” that the Tax was not paid by someone else in the supply chain.

The guidance states that the amount of Tax liability a business owes by way of secondary liability will be worked out by reference to the weight of the PPC connected to it or, if the weight is unavailable, HMRC will estimate the amount using the information available.

Joint and Several Liability

In addition to secondary liability notices, HMRC can serve joint and several liability notices on businesses where it believes there is a risk that actors in the supply chain may not pay the Tax. This would make businesses in the supply chain jointly and severally liable for the Tax in the future and would apply when a business is involved in either transporting, storing, or dealing in PPC; it “knew or should have known” that the Tax was not paid by someone else in the supply chain; and it took steps to avoid paying the Tax.

  1. Impact and How to Comply

The impact of these two updates is likely to be considerable for businesses operating in the plastics sector. On the one hand, greater clarity about the scope of the exemptions and rules around cancelling and deferring the Tax will allow businesses to properly assess their Tax liability. However, the new guidance on secondary and joint and several liability will understandably be of potential concern to businesses. To manage increased costs and steer clear of additional tax liability, businesses should ensure they take appropriate steps to demonstrate compliance with the new guidance.

Businesses should be aware that HMRC will consider their relationships with other actors in the supply chain, as well as what due diligence procedures are in place to check that the Tax is paid throughout the supply chain. It is recommended that businesses ask for details of the amount of the Tax which suppliers or actors in the supply chain with primarily liability have paid and then include these details on invoices. Businesses should also consider ensuring that contracts with suppliers contain compliance provisions with regard to the Tax, including whether it is payable and by whom. HMRC has published separate guidance on due diligence procedures and the Tax, which businesses should make themselves familiar with. 

In the event of a business receiving a secondary liability assessment notice or joint and several liability notice, it may use the evidence described above and HMRC guidance to support a request for cancellation of the notice, which must be made within 30 days of the notice being served.

Please get in touch with us if you have any other questions about the Tax as our expert team will be happy to assist.