HMRC provide updates to the Plastic Packaging Tax ahead of the second quarter return

As we quickly approach the UK Plastic Packaging Tax (PPT) second quarter return (October 31st deadline), HMRC continue to update and review the guidance using industry feedback. Some of the most recent more significant updates are focused around transport packaging exemptions secondary liability, and joint and several liabilities.

Transport packaging

Transport packaging is packaging conceived to facilitate the handling and transport of a number of sales units or grouped packaging in order to prevent both:

  • physical handling damage
  • transport damage

Under the tax, plastic packaging used for transporting imported goods, and for stores on international aircraft, ship and rail journeys are exempt. However, following industry feedback HMRC have amended the legislation, outlining the exemption is more determined by how the packaging is used rather than the type of packaging. Previously this exemption was limited to outer transit packaging, with pallet wrap, pallet banding and plastic pallets listed as exempt examples on import.

HMRC determined last week that the following packaging when used to import goods into the UK are exempt:

  • road, rail, ship or air containers
  • plastic crates, containers, pallets or other heavy duty plastic packaging which are reusable and designed to carry a range of products
  • single-use packaging components such as pallet wrap and retaining straps
  • reusable mail sacks

The exemption for transport packaging does not apply to:

  • any unfilled plastic packaging
  • normal packaging around a sales unit or number of sales units on import
  • intermediate bulk containers, including flexible intermediate bulk containers, used to transport commodities in bulk

Transport packaging is not exempt from PPT when they are manufactured in the UK or imported unfilled. Updated guidance reflecting the position on reusable plastic crates can be found HERE.

Previous PPT returns including reusable plastic crates, where they were used to import goods into the UK, can be amended by signing into your Plastic Packaging Account and selecting ‘View or amend submitted returns’. If you are due a repayment as a result of this, you can request one online via Submit your Plastic Packaging Tax return - GOV.UK.

Secondary Liability

You may be liable for unpaid PPT due from another person, if you are involved in the supply chain of plastic packaging components. HMRC can issue a secondary liability assessment notice if a business have been carrying out activities as part of related business and either:

  • taken steps along with the person with primary liability to not pay the tax
  • been involved in one of the following:
      • transporting chargeable plastic packaging components (e.g., haulier)
      • storing chargeable plastic packaging components (e.g., warehouse owner or operator)
      • dealing with chargeable plastic packaging components (e.g., supplier or retailer)

HMRC will consider the relationship with the liable party and any due diligence checks that were performed to determine the integrity of the supply chain when assessing secondary liability. Examples of due diligence could involve putting clauses in your commercial agreements to confirm if the packaging is chargeable and who is liable or asking for details of PPT paid by the liable party, to include on invoices. For more information regarding due diligence see HMRC’s Guidance HERE.

Secondary liability will be calculated by HMRC with consideration of packaging weights, or estimated weights if not available. Once issued you will be liable to pay alongside the party who has primary responsibility. The notice can be issued within 2 years of the accounting period the notice refers to or 2 years after a court or tribunal has agreed the tax amount. HMRC have warned if deliberate steps not to pay the tax have been taken a secondary liability assessment notice can be issued up to 20 years after the accounting period.

If a business has been mis-identified by HMRC, an appeal to cancel or reduce the tax amount can be made. Further confirmation on how to do this is to be released by HMRC. It is acknowledged that an application should include reasons for why the cancellation or reduction in tax is appropriate, what reasonable steps had been taken to check the person with primary liability had paid and why the amount should be reduced.

Joint and Several Liability

If HMRC believe there is a risk that PPT will not be paid, they can issue notices making businesses in the supply chain jointly and severally liable for future tax. HMRC can issue jointly and several liability when businesses carry out activities as part of related business if either:

  • you know or should know, that the tax will not be paid by the person with primary liability, and you’ve taken steps to avoid the tax being paid
  • are involved in transporting, storing or dealing with chargeable plastic packaging components when the person with primary liability does not intend to pay the tax

Like secondary liability, joint and several liability is assessed through relationship with the primary liable party, but also the activities your business performs in the supply chain, alongside previous due diligences checks performed. For parties jointly and severally liable, an issue will be noticed giving details of the person with primary liability and reasons for the decision. During the next 2 years, the jointly and several liable parties will be required to pay tax if the person with primary liability does not pay. If you do not agree with a joint and several liability notice you can contact HMRC within 30 days and explain why you do not meet the conditions to be held joint and severally liable. Again, HMRC are still to confirm how this can be done.

It is likely HMRC will continue to review aspects of the tax in line with industry feedback and guidance, so be sure to review guidance and keep up to date with legislation. If you have any questions about PPT or how Comply Direct can support your business, please email