HMRC will require certified mechanically recycled plastic for Plastic Packaging Tax from April 2030; pre-consumer scrap stops counting in 2027

How recycled content decides who pays the tax

Plastic Packaging Tax has applied since 1 April 2022 to plastic packaging components made in or imported into the UK. A business must register once it makes or imports 10 tonnes or more of finished plastic packaging components in 12 months, according to HMRC’s steps to take guidance.

The charge works as a cliff. A component with less than 30% recycled plastic pays the full rate on its whole weight, and a component at or above 30% pays nothing. The rate has risen from GBP 200 per tonne in April 2022 to GBP 228.82 from 1 April 2026, as SPI Regulation Tracker record PR-GB-001 sets out.

The tax reaches a wide base. HMRC’s statistics commentary counts 5,142 registered businesses as of 13 August 2026, and 2,970 thousand tonnes of plastic packaging declared in 2025-26, of which 1,107 thousand tonnes were taxable. Accrued receipts were GBP 250 million in 2025-26, against GBP 261 million a year earlier⁹.

No laboratory test can tell recycled plastic from virgin plastic in a finished component. HMRC’s consultation document of 18 May says so directly, which is why the exemption rests on chain-of-custody records: where the material came from, when, and in what share³.

Today businesses choose their own evidence from a non-exhaustive list in HMRC guidance, such as specifications, certificates of conformity, audits and invoices. The consultation document says HMRC does not track which evidence types are used most and holds very little evidence of widespread fraud.

What counts as recycled plastic is the other lever. Mechanical recycling, which sorts, washes, shreds and remelts used plastic, is the route most claims rely on. HMRC confirmed in November 2025 that one category of input will leave the definition in 2027.

Pre-consumer waste is scrap from manufacturing, such as trimmings and rejected parts, that never reached a consumer. HMRC’s policy paper of 26 November 2025 sets 1 April 2027 as the date, and says businesses may still use such material but it will not count towards the 30% threshold⁶.

What HMRC decided on 28 October

The consultation. HMRC opened its consultation at 9:30am on 18 May 2026 and closed it at 11:59pm on 10 August, a 12-week window. It asked 26 questions over seven chapters, on recycling routes, fraud, business impact, how certification would work and timing, according to the consultation page².

The responses. The outcome counts 116 responses: 83 from businesses, 26 from trade bodies or business representative organisations, 1 from a non-governmental organisation and 6 from other stakeholders. A further 22 responses from individuals were kept confidential. Its annex lists respondents including UKAS, REDcert, ISCC System, SCS Standards and the British Plastics Federation.

The history. The outcome lists earlier PPT consultations in March 2018, February 2019, March 2020 and July 2023. The May 2026 paper was a Stage 1 consultation under the Tax Consultation Framework, which seeks views on policy design rather than a worked proposal, so draft rules for mechanical recycling have not yet been published.

What respondents found. Most relied mainly or only on mechanical recycling, especially for PET, HDPE, PP and LDPE. They could not quantify fraud, but most raised concerns about unsupported claims: evidence not tied to a batch or product, double counting, and virgin or pre-consumer material presented as post-consumer recyclate¹.

Imports drew most concern. The outcome says concerns were more common for imported packaging with complex overseas supply chains, where language, definitions and limited visibility make documents hard to check. Concerns about UK manufacturing related mainly to production scrap, internal regrind and traceability.

The decision. Section 2.5 of the outcome, on timing, carries the government’s choice of date.

The design. HMRC will not introduce a single UK scheme. It will set minimum requirements that different schemes can adopt, an approach that mirrors the one taken for chemical recycling, subject to accreditation and oversight by UKAS or an overseas equivalent. The outcome says credible existing and equivalent overseas schemes will be considered for recognition.

How respondents wanted it run. On audit content, respondents asked for provenance checks, chain of custody, controls against double counting, treatment of losses and scrap, and document retention, with risk-based sampling favoured. On oversight, they suggested annual surveillance or desktop reviews of certification bodies, with extra checks where risk indicators appear¹.

Other models. A majority saw third-party certification in other sectors as a useful model, with forestry certification cited most often. Respondents also pointed to Spain’s tax, which relies on third-party certification and the EN 15343 standard for recycled plastic traceability.

The Budget link. The Budget 2026 overview of tax legislation and rates, published the same day, confirms at paragraph 2.26 that certification will apply to businesses claiming the exemption at the 30% threshold from 1 April 2030. It places the measure in Chapter 2, outside Finance Bill 2026-27⁴.

The rate. Paragraph 1.85 of the same document says Finance Bill 2026-27 will raise PPT in line with the Consumer Prices Index from 1 April 2027. The rates annex sets the new rate at GBP 236.56 per tonne, up 3.4% from GBP 228.82, by SPI’s calculation⁵.

What is still open. The outcome gives no cost figures, no audit frequency and no list of recognised schemes. HMRC says certification capacity and market readiness will be revisited closer to the start date, and that the impact assessment will be updated as the detailed framework is developed.

What producers and importers will have to show, and when

The 2027 and 2030 changes stack on the same exemption test. Section 47 of the Finance Act 2021 makes a finished component chargeable when its recycled plastic is under 30% of its plastic, and the changes alter what may be counted as recycled and what proof must sit behind it¹⁴.

For 2027 the legal text is already in draft. HMRC published the draft Plastic Packaging Tax (Chemical Recycling Certification Schemes) Regulations 2027 on 6 October 2026, with a reference document on dual-use factors, and its draft legislation consultation closes at 11:59pm on 21 December 2026⁷.

For 2030 the detail is not yet written. The May consultation document proposed two chain-of-custody models for mechanical recycling: segregated, where certified material is kept apart throughout, and controlled blending, where certified recycled and virgin material are mixed in known shares. The outcome does not say which models will be allowed, and SPI has not yet confirmed whether both survive.

The consultation document also proposed that UK manufacturers from the recycler up to the finished component would hold certification, and that importers would hold valid certificates showing their overseas suppliers are certified. The outcome records that most respondents wanted equal requirements for domestic and imported claims, but it does not set out roles¹.

The May document also described how certificates would be kept current. Accredited bodies would carry out an initial audit, require corrective action where needed, then run surveillance and re-certification audits, at intervals of 12 months to 5 years depending on risk rating. Certification could be suspended or withdrawn, which would remove eligibility for the exemption. These remain proposals until HMRC publishes the framework.

Until 2030, today’s rules on evidence still apply. Businesses keep records on the origin and content of recycled material and the proportions used, and HMRC can assess tax where a claim falls short. The penalty provisions for contravening PPT requirements sit in section 80 of, and Schedule 14 to, the Finance Act 2021, as PR-GB-001 records.

Who carries the cost of certification

Importers. UK imports were 1,390 thousand tonnes of the 2,970 thousand declared in 2025-26, HMRC’s statistics commentary shows. The consultation document noted that less than half of qualifying tonnage came from imports, despite an even split between imports and UK manufacture⁹.

UK converters using pre-consumer regrind. A converter whose 30% claim depends partly on its own or bought-in manufacturing scrap loses that share on 1 April 2027. SPI’s Ledger worked example of plastic packaging taxes showed 1,000 tonnes of trays at 35% recycled content, 10 points of it pre-consumer, moving from no tax to GBP 228,820 a year at the 2026 rate.

Recyclers and reprocessors. Certification bodies will audit the recycler at the start of the chain, and the outcome lists audit, fee, systems and staff costs as concerns without figures. Respondents also warned of capacity limits and reduced availability of certified recyclate¹.

SMEs and low-volume businesses. Nine of the 15 opposed respondents were SMEs, and the outcome names SMEs, importers and low-volume businesses as most exposed to added administration. HMRC says it will consider how requirements can be made proportionate for smaller businesses and low-volume products, without a decision yet.

Brand owners and retailers. A majority of respondents expected at least some costs to pass to customers, though none could estimate the price effect. ALDI UK said in an April 2024 release that its own-label soft drinks bottles were moving to 100% recycled PET, excluding cap and label, saving about 10,000 tonnes of virgin plastic a year¹³.

Brands below the line. Reckitt reported 12% recycled content across its plastic packaging for 2024, 18 points under the tax line, as SPI’s Ledger on UK groups set out. For such packs certification changes little, because the component pays the tax either way.

Certification bodies. The outcome’s annex lists UKAS, REDcert, ISCC System and SCS Standards among respondents, and accredited bodies gain a mandated market from 2030. Respondents named existing schemes including RecyClass, EuCertPlast, the Global Recycled Standard and the Recycled Claim Standard.

The pinch point: certified recyclate and audit capacity

The decision moves risk from HMRC’s audit desk to the supply chain. Today a business that cannot support a claim faces an assessment after the event; from 2030 a component without a certificate from an accredited body will not qualify at all, whatever its real content.

That makes capacity the constraint. The outcome records respondents’ warnings about limited certification capacity, reduced availability of certified recyclate, supplier withdrawal, and businesses switching to virgin plastic or simply paying the tax¹.

HMRC has written that risk into its next step. The outcome says certification and market readiness will be revisited closer to the start date, to make sure enough capacity and practical arrangements are in place for an orderly transition.

The money involved is large relative to the tax take. HMRC’s statistics show 1,506 thousand tonnes relieved at 30% or more recycled content in 2025-26 against accrued receipts of GBP 250 million. At GBP 228.82 per tonne, the relieved tonnage would carry about GBP 344.6 million if it were all taxed, by SPI’s calculation, an illustration of the stakes rather than a forecast.

Respondents wanted transitional recognition of existing evidence, protection for good-faith reliance, registers of recognised schemes, templates and pilots. HMRC has said it will work with industry before 1 April 2030, but specific support measures have not been confirmed.

The impact assessment is the other open front. A majority of respondents to question 26 wanted a fuller assessment, arguing that certification, audit and supplier costs were understated and that interaction with packaging EPR and the EU Packaging and Packaging Waste Regulation needed analysis. HMRC says it will update the assessment as the framework develops.

How the UK approach compares with Spain and the Isle of Man

Certification is already the rule in one other plastic packaging tax that SPI tracks. Spain’s tax on non-reusable plastic packaging, in force since 1 January 2023, exempts recycled plastic only where it is certified by a duly accredited entity, according to SPI Regulation Tracker record PR-ES-001¹⁵.

Spain’s design also differs on the base. It taxes only the non-recycled plastic in a pack, so every certified point of recycled content lowers the bill, while the UK taxes the whole component if it falls under 30%. SPI’s Ledger on plastic packaging taxes records that a manufacturer’s own declaration was accepted in Spain only during the first 12 months¹⁷.

The Isle of Man runs its own plastic packaging tax at the UK rate of GBP 228.82 per tonne with the same 30% test, and Section 76 of the Finance Act 2021 links the two regimes, the same Ledger piece shows. SPI has not yet confirmed whether the Island will adopt the 2030 certification rule.

Inside the UK, the chemical and mechanical routes now run on different clocks. Chemically recycled plastic needs certification under mass balance from 1 April 2027, because mass balance allocates recycled content on paper and cannot work without an audited ledger. Mechanically recycled plastic, which can be traced physically, gets three more years.