Plastic Packaging Tax & CBAM

Plastic Packaging Tax, packaging producer responsibility and the incoming UK Carbon Border Adjustment Mechanism. Environmental taxes are no longer a compliance footnote for manufacturers — they are a cost of the specification, and they are increasingly the reason a product gets redesigned.

Plastic Packaging Tax

• Rate — £228.82 per tonne from 1 April 2026, uprated annually.
• What is taxed — finished plastic packaging components manufactured in or imported into the UK that contain less than 30% recycled plastic. Components meeting the 30% threshold are outside the charge.
• Who must register — businesses that manufacture or import 10 tonnes or more of finished plastic packaging components in a 12-month period, whether or not any tax is actually due.
• Records — recycled content has to be evidenced, not asserted. The recorded chain of evidence from your supplier is what stands between a claimed exemption and an assessment.
• Imported packaging — packaging around imported goods counts too, which catches manufacturers who import components in plastic packaging without ever buying packaging themselves.

The commercial question is straightforward once the numbers are in front of you: at £228.82 a tonne, what does it cost to move a component above 30% recycled content, and what does it cost not to? We model it per SKU rather than in the abstract.

Packaging producer responsibility

Separately from the tax, packaging producer responsibility obligations require larger businesses to report the packaging they place on the market and to pay fees based on it, with modulation intended to favour recyclable formats. The data burden falls on the same teams and the same product records, so it is worth building one dataset that serves both rather than two that disagree.

UK Carbon Border Adjustment Mechanism

The UK CBAM starts on 1 January 2027 and covers imports in the aluminium, cement, fertiliser, hydrogen and iron and steel sectors. A charge will apply based on the emissions embodied in the imported goods, adjusted for carbon priced in the country of origin.

• If you import those goods or components made from them, the practical work now is supplier engagement: establishing what emissions data each supplier can produce, and in what form.
• If you buy from a UK distributor, understand whether the charge will reach you as a price increase rather than a filing obligation — the commercial effect arrives either way.
• Sourcing decisions made in 2026 will determine the 2027 cost base. This is a procurement question with a tax answer.

The wider environmental cost base

• Climate Change Levy and the reliefs available through a climate change agreement in eligible sectors
• Capital allowances on energy efficiency, heat recovery and on-site generation investment — see capital allowances
• R&D relief where decarbonising a process required genuine technological development — see R&D tax credits
• Grant funding for decarbonisation and energy efficiency projects, and the accounting treatment of it
• Reporting: the emissions and energy disclosures that increasingly appear in customer audits and lender covenants

What we do

We register businesses where registration is required, prepare and file the returns, build the evidence trail for recycled content, model the cost of specification changes, and review historic positions where a business has been paying on packaging that should have been exempt — or has not been paying at all.

Part of our manufacturing accountants practice, alongside import, export and customs.

Frequently asked questions

What is the Plastic Packaging Tax rate now?

£228.82 per tonne from 1 April 2026. It applies to finished plastic packaging components containing less than 30% recycled plastic, and it is uprated each year.

Do we have to register even if we owe nothing?

Yes, if you manufacture or import 10 tonnes or more of finished plastic packaging components in a 12-month period. Meeting the 30% recycled content threshold takes the packaging out of charge, but it does not remove the registration and reporting obligation.

How do we prove recycled content?

With evidence from your supply chain — supplier certification and the records that trace recycled input through to the component. HMRC expects a documented chain rather than a statement on a specification sheet, and an unevidenced claim is treated as if the packaging were fully virgin.

Does packaging around goods we import count?

Yes. Packaging imported around other goods can fall within the tax, which regularly catches manufacturers who import components or materials but never purchase packaging directly.

When does UK CBAM start and what does it cover?

1 January 2027, covering imports in the aluminium, cement, fertiliser, hydrogen and iron and steel sectors. The charge is based on emissions embodied in the imported goods, with an adjustment for carbon already priced overseas.

What should we be doing about CBAM in 2026?

Mapping which of your imports fall in scope, and asking suppliers now what emissions data they can provide and in what format. Sourcing decisions taken this year set the 2027 cost base, and suppliers who cannot produce data will be more expensive to buy from by default.