As the first anniversary of the UK’s Plastic Packaging Tax (PPT) approaches on 1st April, Freedom of Information (FOI) data shows the tax has generated over £200m in revenue and is on course to exceed HMRC’s first-year target by more than £30 million.
The packaging manufacturer and consultancy Duo made an FOI request which revealed the data and covers the tax’s first full three quarters from April to December 2022.
According to Duo, the FOI data for the three quarters shows £200,125,000 has been paid by companies in PPT revenue – HMRC estimated in a policy paper that the tax would generate £235 million in its first 12 months.
Tax revenue in each of the three quarters averaged £66.7 million. If the trend continues in the last quarter, total PPT revenue for the first year will top £266 million.
Around 1 million tonnes of plastic packaging were liable for the £200 per tonne tax (i.e. packaging that did not contain at least 30% recycled plastic content).
Duo, and other businesses we speak to, would like to see this revenue reinvested into the UK’s recycling infrastructure.
Over 254 million tonnes of plastic packaging were declared by companies and 61% of all declared packaging was tax-exempt, with a large proportion of this packaging containing 30% or more recycled plastic.
3,220 companies completed PPT returns during the third quarter (October to December 2022), which was 38% higher than the 2,328 companies that made submissions during the first quarter of the tax.
Director at Duo, Zoe Brimelow, commented: “The PPT is well on course to earn more than £266 million in its first year. This would be £30 million over target, and it’d be interesting to know how this revenue will be spent by the government.
“At the top end of estimates, HMRC estimated it would incur £42 million in costs to set up, staff and deliver the tax in year one. Once costs are paid, there could be £220 million remaining from what’s essentially a new source of revenue.
“Duo, and other businesses we speak to, would like to see this revenue reinvested into the UK’s recycling infrastructure to support the increasing number of companies that are making huge efforts to use more recycled content in their packaging.”