Corporate report

PackUK: annual report 1 April 2025 to 31 March 2026

Updated 30 September 2026

Foreword – Jeremy Blake, CEO, PackUK

This was a year of significant activity with PackUK breaking new ground establishing the operational delivery of UK extended producer responsibility (EPR) for packaging. The PackUK team, hosted on behalf of the 4 nations, is now an established delivery organisation. We have achieved key milestones and handled transactions with real care, even where challenges arose. Some highlights from the period include the successful payments of grants to local authorities, the collection of recyclability assessment methodology (RAM) data ahead of introducing eco-modulated fees, the generation of the first round of notices of liability and collection of funds. I’ve been delighted to see local authorities spending EPR for packaging funding on improvements to waste and recycling services, a realisation of the activity EPR for packaging was designed to generate, delivering positive environmental and economic outcomes for local people. We have benefitted from learning from our network of expert advisers, and I feel privileged to lead our team of specialists dedicated to unlocking a circular packaging future for the UK.

Introduction

As the scheme administrator for EPR for packaging, PackUK is required to publish an annual report each September for activities undertaken during the financial year ending the previous March. The 2025 to 2026 financial year was the first full year of operation for the scheme. This report outlines PackUK’s progress against the interim strategy published in June 2025, and its 2025 to 2026 Operational Plan published in February 2025.

PackUK has developed a 5-year strategy, which is due to be published later in 2026. The strategy sets out the objectives, priorities, and actions needed to deliver the policy aims and environmental benefits of EPR for packaging through to 2031. Once published, the strategy will replace the interim strategy and future annual reports will evaluate against its objectives and key performance indicators (KPIs).

The 4 nations governments were consulted during the development of this report.

Progress against the year 1 goals in PackUK’s interim strategy

Goal 1: deliver the key outcomes outlined in the UK joint policy statement on extended producer responsibility for packaging

The 4 nations governments set out PackUK’s key first-year deliverables in a joint policy statement on EPR for packaging published in February 2025.

During 2025 to 2026, PackUK established its governance and reporting structures. Progress and risks are reported monthly to the 4 nations Scheme Administrator Executive Committee, and quarterly to a 4 nations ministerial steering board.

PackUK published final producer base fees for year 1 of the scheme on GOV.UK in June 2025, following the publication of illustrative base fees in December 2024. Illustrative fees for year 2 of the scheme were also published in December 2025. The first modulation statement was published in June 2025.

A summary of PackUK’s work on local authority efficient and effective management of packaging waste is provided under Goal 6.

To enable public information campaigns, PackUK:

• established the Communications and Behaviour Change Advisory Group

• recruited a Head of Communications and Engagement and Communications Manager

• appointed UK Packaging PRO, who will deliver public information campaigns as a delegated function

Goal 2: appoint a Producer Responsibility Organisation (PRO) to carry out several key functions on its behalf

Following a rigorous selection process, PackUK appointed UK Packaging PRO as the Producer Responsibility Organisation for the UK’s EPR for packaging scheme. The formal appointment of UK Packaging PRO commenced on 1 April 2026, with responsibilities to be introduced gradually, drawing on well-established international best practice in establishing similar industry-led organisations.

This appointment will strengthen the partnership between government and industry, harnessing the insights and expertise of producers and providing a unique opportunity for stakeholders across the value chain to shape the future delivery of the EPR for packaging scheme.

PackUK retains responsibility for key scheme decisions, including local authority payments and producer fees.

Goal 3: appoint senior staff

PackUK strengthened its executive leadership through permanent appointments to the Chief Executive Officer, Chief Operating Officer and Chief Strategy Officer roles. These increased organisational capacity, and supported effective governance and delivery across the 4 nations of the UK.

In 2026 to 2027, PackUK will continue to strengthen leadership and organisational capability to support delivery of its statutory responsibilities, including through the recruitment of a Chief Financial Officer.

Goal 4: implement governance and technical advisory committees

PackUK’s activities are overseen by a 4 nations ministerial steering board, the Scheme Administrator Executive Committee, and an Audit and Risk Assurance Committee. These boards will ensure an equal role for each of the 4 nations in PackUK’s decision-making and assurance.

PackUK established 3 technical advisory committees covering:

• the recyclability assessment methodology

• local authority efficiency and effectiveness

• communications and behaviour change

The Scheme Administrator Steering Group was also re-established. These groups bring together representatives from across the packaging value chain to provide expert advice and recommendations.

Details about the membership of PackUK’s governance boards and advisory committees can be found on our governance page.

Goal 5: deliver the recyclability assessment methodology (RAM)

PackUK continued to develop and implement the RAM, which determines how packaging recyclability affects the modulation of EPR for packaging fees.

PackUK established the RAM Technical Advisory Committee and worked closely with industry, regulators and 4 nations policy teams to review and refine the RAM. Between October 2025 and March 2026, PackUK carried out technical reviews, stakeholder engagement and planning activities to develop RAM 2027. In tandem, PackUK engaged in 2 rounds of user research, improving the structure and user experience of the RAM.

The first draft of RAM 2027 was produced in February and March 2026 and subsequently underwent extensive review by regulators, 4 nation policy teams, legal advisers and technical experts. Following further revisions and governance approvals, publication preparations were completed by June 2026.

This work helped ensure the RAM:

• remains evidence-based

• reflects developments in recycling infrastructure

• responds to stakeholder feedback

• encourages more sustainable packaging design

RAM 2027 was published on 1 July 2026. It strengthens the link between recyclability ratings and real‑world outcomes, including the introduction of new automatic red categories and clearer guidance on contamination and how it affects recyclability across the system. By placing greater emphasis on real‑world collection and recycling data, it ensures outcomes better reflect what is achieved in practice rather than what is theoretically possible, supporting delivery of the EPR for packaging scheme’s environmental outcomes.

As work on the next RAM iteration begins, PackUK will work with UK Packaging PRO to ensure the decision-making framework is as transparent as possible. This will provide greater traceability and visibility on how RAM development will be taken forward, including how data and evidence from stakeholders across the value chain can be submitted and will be considered.

Goal 6: deliver efficiency and effectiveness (E&E) pilots

In 2025 to 2026, PackUK delivered 6 improvement action process (IAP) pilots with volunteer local authorities in England, Scotland and Northern Ireland. 6 support organisations were appointed to work with the pilot local authorities to test the IAP and produce specific improvement actions for each local authority. PackUK evaluated the pilot results and will use the findings to develop its long-term approach to working with local authorities.

The pilots identified a range of improvement actions in key areas:

• behaviour change

• kerbside collections

• collections at household waste recycling centres

• infrastructure and operational management

The pilots helped PackUK understand how best to assess and support local authority performance, in the wider context of PackUK’s work to drive efficiency and effectiveness of waste management services. Work is now underway with the 4 nations and the Efficiency and Effectiveness Technical Advisory Group to develop effectiveness assessments for delivery no later than 2028.

Goal 7: align with Devolved Government policies and strategies

PackUK continues to work with the 4 nation governments to align its activities with wider circular economy strategies and policy objectives. The governance boards which oversee its activities include senior representatives from each nation. PackUK has collaborated with the 4 nations governments in the development of its 5-year strategy, which we expect to publish later in 2026.

Progress against the commitments in PackUK’s 2025 to 2026 Operational Plan

Fees and payments

PackUK set out key dates and milestones for invoicing obligated producers, producer and local authority payments and publication of its modulation strategy.

PackUK confirmed 2025 to 2026 disposal fees in June 2025, based on 2024 packaging data. In July 2025, PackUK then issued notices of assessment (NoAs) to all local authorities across the UK, confirming the amounts that PackUK intended to pay in the 2025 to 2026 scheme year. These amounts were subject to PackUK receiving sufficient income from packaging producers to make full payments.

PackUK also published its first modulation policy statement in June 2025 setting out how household packaging waste disposal fees would be modulated from 2026 to 2029, based on recyclability.

In the 2025 to 2026 assessment year, PackUK anticipated paying local authorities £1.44 billion. With the addition of administrative and public information costs of £27 million and a 4% impairment charge levied on all packaging producers, the total income expected to be raised was £1.523 billion.

On 14 October 2025, PackUK then issued the first notices of liability (NoLs) for the EPR for packaging scheme using the fees published in June 2025. The first NoLs raised a total of £1.46 billion, based on the data reported through the ‘Report Packaging Data’ (RPD) service as of 22 September 2025. This also included an estimate of packaging tonnage from non-compliant packaging producers expected to be brought into the scheme through compliance activity over the remainder of the financial year. As noted in PackUK’s 2026 to 2027 operational plan, this figure was £63 million lower than the required income for the year, reflecting the estimated additional tonnage that would be reported by producers who had not met the submission deadlines prior to the end of the scheme year.

Following the issuing of NoLs, much of this packaging tonnage was brought into the scheme through ongoing compliance monitoring efforts from the 4 environmental regulators. In parallel there were large numbers of packaging data resubmissions from packaging producers resulting in a net reduction in obligated packaging tonnage compared to the position in October 2025, ahead of a planned recalculation of NoLs in March 2026.

As a result, PackUK would have been required to increase the per-tonne fees charged in order to meet local authority costs. To support the scheme in its first year of operation, Defra provided additional funding of £102 million which ensured packaging producers did not face fee recalculations and local authorities received their full funding. This was done on an exceptional basis as a one-time intervention to maintain stability during the first year of the scheme.

On the back of this funding commitment, PackUK issued revised NoLs to obligated packaging producers on 25 March 2026, confirming their obligations for the 2025 to 2026 scheme year. In this revised calculation, PackUK’s total revenue raised for the year was £1.411 billion. The £102 million provided by Defra brought the scheme to the required £1.523 billion.

Direct Debit incident

The first payment under NoLs issued in October 2025 was due on 3 December 2025. For packaging producers who had opted to pay their waste disposal fees by direct debit, the first payment would be taken on this day.

On 2 December, PackUK became aware of an issue which led to direct debit collections being taken three times for some packaging producers. This affected approximately 11% of obligated producers, with a total over-charge of £143m.

In response, PackUK established an incident response team. The team contacted all affected producers to ensure that support could be offered in the event of cashflow challenges, protecting businesses from the immediate impact. Throughout the incident, PackUK provided regular updates to affected packaging producers, compliance schemes and trade associations.

The incident response team worked continuously to resolve the incident. PackUK issued refunds to the majority of packaging producers on 4 December, with the final refunds completed on 5 December. Further activity was conducted with affected packaging producers to ensure that no producers were left out of pocket following the refunds.

In the aftermath, PackUK conducted a full root cause analysis, and deployed a fix to its digital systems to ensure there would not be a repeat. PackUK also revised its operating procedures, where all direct debits are checked manually for accuracy before being raised against packaging producers. These fixes ensured that subsequent direct debit collections on 3 March 2026 and 1 June 2026 were completed.

Public information campaigns

During April 2025 to March 2026, PackUK focused on building the capability needed to deliver future public information campaigns that encourage citizens to reduce, reuse and recycle.

Industry experts were recruited to join the Communication and Behaviour Change Advisory Group. In this period, the group discussed the theoretical basis for public information activities in the future. PackUK acknowledges that due to operational priorities and staff recruitment timelines this advisory committee has moved at a slower pace than others.

PackUK successfully recruited for a Head of Communications & Engagement and Communications Manager, securing the resources to push public information strategy and campaigns forward. Focuses included growing awareness of WRAP’s recycling locator service across the UK (scheduled for autumn 2026).

Financial services supplier (FSS)

The FSS oversees the collection of fees from obligated producers and the issuing of payments to local authorities. The FSS service went live in October 2025, and enabled PackUK to:

• issue NoLs

• receive payments from packaging producers

• issue grants to local authorities

• provide self-service support for packaging producers and compliance schemes

Implementation continued throughout the year to provide capability to issue recalculated NoLs to affected packaging producers.

Producer Responsibility Organisation (PRO)

An update on the appointment of UK Packaging PRO is provided earlier in this report under Goal 2 of the interim strategy.

Efficiency and effectiveness (E&E)

An update on PackUK’s improvement action process (IAP) pilots is provided earlier in this report under Goal 6 of the interim strategy.

Effectiveness assessments will be delivered no later than 2028 and PackUK is evaluating the available data and metrics which will be used. PackUK will publish further information once the assessment approach and supporting metrics have been agreed.

Ongoing engagement has continued through PackUK’s Efficiency and Effectiveness Technical Advisory Committee, IAP local authority pilots and local authority associations.

Statutory obligations

PackUK met its statutory obligations during 2025 to 2026 by:

• publishing its first modulation policy statement

• issuing notices of assessment and notices of liability

• publishing local authority payment guidance

• publishing an interim strategy

• publishing its annual report for 2024 to 2025

PackUK has not updated the list of packaging items commonly disposed of in public bins or as ground litter in this period. The current list can be found in Step 4 of the guidance on what to report for EPR for packaging under the heading ‘Packaging type: commonly ends up in public bins’.

Financial overview

PackUK is hosted by Defra. From 2025 to 2026, producers of household packaging have been liable for waste disposal fees designed to shift the cost of managing household packaging waste from taxpayers to producers. The legislation governing the collection of fees from packaging producers sets out the purposes for which funds can be used, and the total charge is made up of the following:

• a base fee to cover local authority costs for managing household packaging waste, calculated using packaging waste management costs, other relevant costs, and the weight of household packaging placed on the UK market

• administration fees to cover the cost of running the scheme, calculated based on expected PackUK costs for the year

• an impairment contingency to cover fees that the scheme administrator may be unable to recover from packaging producers because of insolvency or any other reason

HM Treasury has classified these fees as a tax. In line with the Government Financial Report Manual (FREM) adaptation to IFRS 15a, there are no performance obligations associated with this revenue.

Under UK government accounting rules, fees received are recognised as income in line with the related expenditure, as follows:

• base fees are recognised as income when related grant expenditure is recognised, such as when determination letters are issued to local authorities

• administration fees are recognised as costs, and are incurred on an accruals basis by PackUK

• bad debt charges are realised when a debt can no longer be collected from an obligated producer, for instance due to insolvency, and the debt is written off

• unused impairment contingency amounts are recognised as a refund liability until they are needed to cover fees that cannot be recovered from packaging producers, with any remaining balance potentially returned to packaging producers through a future recalculation

PackUK is required to provide details of fees paid by packaging producers and the amounts distributed to local authorities. PackUK manages the issuing of invoices, payments and cash requirements. However, accounting entries representing fees paid and amounts disbursed to local authorities are processed within each of the 4 UK nations’ statutory accounts.

A summary of the financial position reflected in the 4 nations accounts:

	England	Wales	Scotland	Northern Ireland	Total
Waste disposal fees raised from packaging producers	(£1,096.9 million)	(£93.4 million)	(£165.8 million)	(£53.6 million)	(£1,409.8 million)
Payments to local authorities	£1,039.9 million	£88.7 million	£157.4 million	£50.9 million	£1,336.9 million
Payments to PackUK	£14.8 million	£1.2 million	£2.0 million	£0.7 million	£18.7 million
Expected credit loss estimates 31 March 2026	£13.5 million	£1.1m million	£2.0 million	£0.6 million	£17.2 million
Refund liability held on the scheme	£28.7 million	£2.5 million	£4.4 million	£1.4 million	£37.0 million

Between 1 April 2025 and 31 March 2026, PackUK:

• collected £1.41 billion in waste disposal fees from obligated packaging producers

• paid £1.34 billion to local authorities across the United Kingdom

• funded £18.7 million of scheme administration costs, excluding expected credit loss, which was lower than expected due to digital costs being funded by Defra for the first year of the scheme.

In addition to PackUK disbursement to local authorities, Defra distributed and funded a further £102 million to ensure that local authorities across the UK received 100% of expected funding.

An impairment provision of 4% was included in 2025 to 2026 fees, creating a provision of £50 million. During the financial year, PackUK has adopted an approach consistent with the requirements of IFRS 9 and the Expected Credit Loss (ECL) framework. The model adopted considers past customer behaviours, current information and future expectations, taking into consideration:

• notice of liabilities paid in full

• historical customer payment behaviours and known future payment intentions

• known insolvencies for debts yet to be written off

• risk-based assumptions for customers who are not adhering to payment plans

At 31 March 2026 there were no outstanding payments due to local authorities, and £770 million of the fees raised have been collected, including £150 million of notice of liabilities settled in full. No write off occurred during the financial year. An ECL estimate of £17 million has been reflected in the 4 nations accounts, together with a rebate liability of £37 million.

Future outlook

During 2025 to 2026, PackUK successfully established the foundations of the UK’s EPR for packaging scheme. Key achievements included collecting and distributing packaging producer fees, launching the RAM, appointing the UK Packaging PRO and putting governance arrangements in place.

The forthcoming 5-year strategy will move PackUK’s focus from implementation to delivering long-term environmental outcomes. By 2031, PackUK aims to help create a more circular packaging system by incentivising packaging producers to reduce unnecessary packaging, increase reuse, and improve recyclability through evidence-led fee modulation. PackUK will also work to drive greater efficiency and effectiveness in recycling services, support investment in collection and recycling infrastructure, deliver behaviour change campaigns to encourage recycling and reuse behaviours, strengthen our use of data and insights and deliver high-quality services for packaging producers and local authorities

Working closely with UK Packaging PRO, the 4 nation governments, regulators and stakeholders across the value chain, PackUK will focus on creating greater certainty, improving performance and delivering measurable progress towards the UK’s circular economy targets.