Research and analysis

Plastic Packaging Tax: qualitative research

Published 28 October 2026

1. Glossary 

Term (and acronym, where applicable)	Definition
Business-to-business (B2B)	A transaction or business conducted between one business and another, such as a wholesaler and retailer.
Chief Executive Officer (CEO)	The highest-ranking person in a company or other institution, ultimately responsible for taking managerial decisions.
Consumer Price Index (CPI)	The speed at which the prices of the goods and services bought by households rise or fall.
Extended Producer Responsibility for packaging (pEPR)	UK regulations that mandate affected organisations to report packaging data and pay respective fees. These organisations include those with an annual turnover exceeding £1 million that supply over 25 tonnes of packaging annually. Different obligations are in place depending on an organisation’s size, which can be categorised as ‘small’ or ‘large’. Packaging is defined broadly to include any material covering or protecting goods, while specific actions depend on whether a company is branding, importing, or supplying packaging, among other activities. pEPR requires packaging producers to cover the full costs associated with managing household packaging waste, such as collection, sorting, treatment, and recycling.
HM Revenue and Customs (HMRC)	The tax authority of the United Kingdom, responsible for collecting taxes, administering benefits, and enforcing tax and customs laws.
Mass balance approach	A mass balance approach tracks the total amount of recycled and non-recycled plastic that enters a manufacturing process, using this to allocate the appropriate proportion of recycled content to the final product. This is useful when different types of feedstock are physically mixed during production, and so the actual amount of recycled content in each individual output component is unknown.
Post-Consumer Recycled (PCR)	Materials that have been recycled from products that have already been used.
Plastic Packaging Tax (PPT)	A UK tax on finished plastic packaging components with less than 30% recycled plastic content.
Small and Medium-sized Enterprise (SME)	Any organisation that has fewer than 250 employees and a turnover of less than £44 million or a balance sheet total of less than £38 million.
Plastic Packaging Tax rate	For the financial year 2025 to 2026 the tax is charged at £223.69 per tonne and applies to manufacturers and importers of plastic packaging components which contain less than 30% recycled plastic.

2. Executive summary 

2.1 Introduction and methodology 

The Plastic Packaging Tax (PPT) aims to promote increased use of recycled plastic by taxing manufacturers and importers of plastic packaging which contains less than 30% recycled plastic. The tax applies to businesses who import into the United Kingdom (UK) or manufacture in the UK more than 10 tonnes of plastic packaging annually.  

All businesses manufacturing or importing over 10 tonnes of plastic packaging annually need to register for PPT with HM Revenue and Customs (HMRC) and submit returns. This includes businesses that meet the 30% recycled plastic threshold for all their packaging — they must still register with HMRC, although they are exempt from paying the tax. 

This qualitative research, commissioned by HMRC, aimed to gather insights from businesses registered for PPT both on its effectiveness since its implementation, and to inform future policy decisions. The research consisted of 50 in-depth interviews with UK businesses that are currently registered for PPT, conducted between May 2025 and July 2025. The sample was drawn from HMRC’s database of PPT-registered businesses. 

2.2 Key findings 

PPT awareness 

All businesses interviewed showed a strong awareness of PPT, including the 30% threshold, the rate, and that the rate had changed over time. They had undertaken initial research to familiarise themselves with the tax in preparation for its implementation in April 2022 or when they began completing PPT tax returns. Many participants were directly responsible for submitting returns or had some oversight due to their roles within their company. 

Approaches to PPT 

Many interviewed businesses paid PPT only on virgin plastic packaging or on plastic with less than 30% recycled content, whereas a few opted to take a cautious approach and paid the tax on all their products, regardless of recycled content. The following reasons were provided for adopting this approach:  

• overseas parent companies not prioritising accurately tracking the volume of recycled plastic that may have been used, as PPT was not a priority for them  

• not trusting their suppliers’ information on the recycled content of their packaging 

• worrying about lacking sufficient or correct evidence and potentially being found non-compliant  

Influences on plastic packaging decision-making 

There were several key factors that influenced businesses’ decision-making and strategy on plastic packaging:  

• the cost of virgin and recycled plastic  

• quality of plastic packaging with recycled content 

• customer preference and demand 

• sustainability or Environmental, Social and Governance (ESG) policies 

• other compulsory requirements affecting certain industries (for example, food and medical industries are required to use virgin plastics due to purity and safety standards)  

Changes in plastic packaging content since 2022, for businesses that had decreased virgin plastic, or increased recycled plastic, or both 

Many businesses had actively worked to increase the recycled content in their packaging, including by reformulating packaging materials, redesigning packaging formats, and collaborating with suppliers to source recycled plastics. In some cases, they had even changed their suppliers. Among those who had implemented changes, many said they targeted the 30% recycled content threshold, while others pursued more ambitious goals, driven by their commitment to sustainability.  

For many businesses, PPT was seen as a catalyst for change, not only incentivising compliance with the 30% recycled content goal but also promoting a broader industry trend towards recycled materials. The key driving factors behind industry change identified in interviews were: 

• desire to not have to pay PPT (by ensuring plastic packaging products had over 30% recycled content) 

• the need to meet sustainability objectives in the business itself, or in the businesses buying the products  

• customer demand for higher recycled content 

Businesses that had not made changes to their plastic packaging since 2022

Despite many businesses wanting to reduce virgin plastic and increase recycled content, some had not significantly altered their packaging practices for various reasons. For some businesses, this was the most economical option, as the additional cost of changing processes would have outweighed any savings in PPT they would have made. In addition, some suppliers did not offer recycled plastic packaging, and businesses were reluctant to harm good supplier relationships by switching. The quality of plastic packaging also played a key role. Excessive recycled content was sometimes seen to compromise product quality, making it unsuitable for its intended use. 

Types of PPT impacts on businesses 

The main impact of PPT was the cost, which affected businesses either directly or indirectly. PPT itself directly imposed a new financial duty on businesses, though many perceived it as manageable. Some businesses met the 30% recycled content threshold on all plastic packaging and so they did not have to pay the tax, but this was rare. Some companies passed the cost on to customers, particularly in business-to-business (B2B) contexts. Others absorbed the cost to maintain competitiveness or customer demand.  

For small businesses in particular, an additional indirect impact of PPT was the initial demand on time and resources required to set up new processes and systems to comply with the tax. Familiarising themselves with PPT, gathering necessary data, and performing calculations were initially burdensome. Many businesses had to further dedicate resources to monitor supply chains and ensure suppliers included the correct amount of recycled content. Businesses with less sophisticated administrative systems faced extra challenges, such as setting up reporting mechanisms and upgrading IT systems. However, many businesses reported that these burdens eased once the system was in place.  

Aside from PPT, the Extended Producer Responsibility for packaging (pEPR) scheme, which replaced the previous producer responsibility regulations, significantly impacted businesses involved in plastic packaging manufacturing and importing. A few perceived it as a duplicate tax on the same materials.  

General cost increases since 2022 further affected businesses, with many noting rising costs becoming routine. Highlighted areas of concern included increased costs for freight, shipping, raw materials, packaging, and energy. Some manufacturers faced very large energy cost increases, forcing them to raise prices and lose some business. Moreover, businesses experienced increased staff costs as an added burden. 

Possible future changes to PPT 

Scenario 1: PPT rate continues to increase annually in line with Consumer Price Index (CPI) inflation 

Many businesses indicated that they would continue their current practices, recognising that costs are expected to rise over time, requiring adaptation. Some suggested that the upward trend in the cost of virgin plastic might support a shift to recycled content. However, some expressed concern that additional cost increases could adversely affect their businesses, and potentially result in them passing these onto customers. 

Scenario 2: PPT is removed 

Businesses that had made changes to plastic packaging typically said that the removal of PPT would not trigger a reversal of these changes. Sustainability had become a stronger driver than PPT alone for many businesses, and businesses were committed to continuing their efforts to reduce environmental impact, regardless of the tax. Some businesses noted that it would be impractical to request their suppliers to change their practices again. However, the removal of PPT was expected to slow down the pace of change, as the financial incentive to reduce virgin plastic use would no longer exist.  

Scenario 3: PPT cost per tonne or 30% threshold increases 

While the impact of this scenario would depend on how much the cost per tonne or threshold would increase by, there was a consensus that it would likely have a negative impact on businesses. This type of increase would prompt businesses to re-evaluate their packaging practices and explore new strategies for reducing virgin plastic usage. However, some concerns were raised including businesses having to pass the increased cost onto customers, potentially impacting their competitiveness, and the availability of recycled plastics to meet increased demand.  

Experience of completing PPT returns 

Overall, experiences with PPT returns were mixed. Initially, businesses found the process challenging, as they had to set up new systems for tracking and reporting plastic packaging data. However, over time, the process became easier as businesses gained experience and developed efficient workflows. Nevertheless, some businesses still found completing PPT returns difficult, particularly small businesses that did not have established and efficient measuring systems in place or sufficient resources. Some instances were mentioned where businesses had sought advice from HMRC unsuccessfully. 

Suggestions for improving the PPT return process 

While many businesses reported having had positive experiences when submitting PPT returns, several suggestions on how to improve the PPT return process were raised. These included aligning with pEPR deadlines to reduce administrative burden, providing reminders ahead of submission deadlines, streamlining processes on exporting and importing, and providing clearer guidance and communication from HMRC on specific aspects of the process, particularly eligibility of certain products.  

3. Introduction 

3.1 Project context, aims and research questions 

The Plastic Packaging Tax (PPT) was introduced on 1 April 2022 to encourage the use of recycled plastic in packaging. The tax applies to businesses who import or manufacture more than 10 tonnes of plastic packaging annually. The rate of the tax is £223.69 per metric tonne of plastic (as of 1 April 2025), rising to £228.82 per tonne from 1 April 2026, for plastic packaging components that contain less than 30% recycled content.   

All businesses manufacturing or importing over 10 tonnes of plastic packaging annually need to register for PPT with HM Revenue and Customs (HMRC) and submit returns. This includes businesses that meet the 30% recycled plastic threshold for all their packaging — they must still register with HMRC, although they are exempt from paying any PPT. 

This research aimed to gather insights into the impact of PPT since its implementation and inform future policy decisions. It also forms part of a wider evaluation of PPT. 

Specifically, the study focused on 4 overarching questions: 

Question 1: How have businesses changed their use of virgin and recycled plastic in packaging since PPT was introduced in April 2022, and what has driven these changes? 

Question 2: What type of impact did PPT have on businesses? 

Question 3: How might businesses respond to changes to the PPT rate or 30% threshold?

   Question 4: What were businesses’ experiences of submitting PPT returns, and how can HMRC help businesses address any challenges? 

3.2 Research method 

Ipsos conducted 50 semi-structured qualitative in-depth interviews between May 2025 and July 2025 with businesses in the UK registered for PPT. The sample was drawn from HMRC’s PPT database. 

To ensure informed responses, recruitment for this research targeted senior decision-makers involved in plastic packaging decisions, and ideally individuals who were responsible for, or had previously been responsible for, submitting PPT returns. A recruitment screener was developed and used in recruitment to ensure a range of views were captured across the following characteristics:  

• business type:

  • manufacturer

  • importer

  • both  

• relative plastic tonnage by weight:

  • smallest 20%

  • second smallest 20%

  • middle 20%

  • second highest 20%

  • highest 20% 

• UK countries:

  • England

  • Scotland

  • Wales

  • Northern Ireland 

• length of PPT registration:

  • those who registered in the first year of PPT (before April 2023)

  • those registered in the second year of PPT (in or after April 2023) 

Ipsos and HMRC developed 2 semi-structured discussion guides to ensure businesses were asked questions that were relevant to them: one for manufacturers and one for importers. Both discussion guides followed the same structure and were intended to address the following research topics:  

• business background, context, and awareness of PPT 

• changes businesses may have made in their use of virgin and recycled plastic packaging since April 2022 

• impact of PPT on businesses 

• potential changes in businesses’ decision-making around plastic packaging if the tax changed 

• experiences with PPT returns, and how HMRC can help address any issues  

Interviews lasted between 45 and 60 minutes. Data from the in-depth interviews was transcribed from audio recordings and coded to analyse and identify recurring themes. Researchers examined these themes, patterns and trends against key business characteristics such as importer or manufacturer status, business size, and sector.  

 Interpretation, generalisability of findings, and limitations 

The findings in this report are intended to provide insight into the behaviours, decision-making processes, views, and experiences of a range of businesses that import or manufacture plastic packaging products into or in the UK.  

This research is qualitative, a method which explores the range of attitudes and opinions of participants in detail. Therefore, findings cannot be quantified or generalised to other groups or settings, and they are not representative of the entire population of businesses in the UK. Instead, they are focused on exploring, understanding, and interpreting subjective experiences and meanings. 

3.3 Business characteristics 

To ensure informed responses, recruitment for this research targeted senior decision-makers involved in plastic packaging decisions, and ideally individuals who were or had been responsible for PPT returns. The aim was to ensure participants were able to comment both on the process of submitting returns and on decision-making processes around plastic packaging, including any changes that might have been made since the tax was introduced. All participants held senior positions in their businesses, often in finance-related roles (such as Chief Executive Officer, Managing Director, or Finance Director) or in sustainability-related roles with at least some remit over PPT. 

Whether businesses manufactured or imported plastic packaging products was a core differentiator for this research. Businesses were categorised as either manufacturers, importers, or both. 

Most businesses were small and medium-sized enterprises (SMEs), and around a fifth were large businesses. Most were from the wholesale, retail and manufacturing sectors. Examples included companies working with pharmaceutical products, cosmetics, food and beverages, and technology.  

The study included businesses importing and manufacturing varying volumes of plastic packaging. 

4. PPT awareness and approaches 

4.1 PPT awareness  

All interviewed businesses demonstrated good awareness of PPT, having conducted initial research to familiarise themselves with the tax in the run-up to its roll-out in April 2022, or when they had to start completing the tax returns. Many were either personally responsible for submitting returns, or had some level of oversight of the process. 

“I think very familiar [with PPT], because…we needed to join it from the beginning, so we did a lot of research and figured out the different rules…that apply.” (Importer and manufacturer, cosmetics) 

Many businesses understood both the rate and the 30% threshold of the tax. While some could not recall the cost per tonne, they knew where to find the information, and knew that the rate had changed over the years. Some businesses noted having received guidance from HMRC, including through webinars businesses could attend.  

“It’s quite a simple process because we are weight based. So, it’s easy for us to get that calculation.” (Importer and manufacturer, sales and distribution)  

4.2 Approaches to PPT  

Many interviewed businesses paid PPT only on virgin plastic packaging or on plastic with less than 30% recycled content, as opposed to paying tax on all their products regardless of recycled content. Whilst some importers said that all the plastic they imported met the 30% threshold, no manufacturers said this was the case for all the plastic packaging they made. A very small number of businesses interviewed were wholly exempt from paying the tax, either because all their products reached the 30% recycled content threshold, or because they did not exceed the 10-tonne annual threshold. 

Many businesses had systems in place for tracking the amount of plastic packaging they needed to pay tax on. Importers mentioned calculating the units or weights of plastic packaging, as well as the amount of 30%+ post-consumer recycled (PCR) plastic used, and reported this information when they submitted returns. The exact methods used to measure the packaging weight were not specifically asked about or mentioned. One business mentioned outsourcing the PPT return process, using an external company to collate data and deliver it in the formats needed for submission. 

“So, we have a great degree of commonality throughout our packaging which means that we’re able to predict very accurately how much tonnage we’ll be moving based on what the orders that we’ve actually placed.” (Importer, distribution) 

“I analyse all of my imports throughout the quarter and then I separate out the products that have 30% or more recycled content and the products that are left, obviously, I have the net weight of every product, of the raw material.” (Importer, distribution) 

Some businesses mentioned tracking how much of their packaging ends up being exported, so that they could claim tax relief on that amount. Conversely, another business said that they paid PPT on all their tonnage regardless of it being exported, due to the administrative burden of tracking exports.  

A few businesses purchased some of their plastic packaging in the UK, which meant that they did not need to pay the tax on the products as they were not imported. One of these businesses explained that when purchasing from UK-based manufacturers, the manufacturers would pay PPT, and then pass this cost on to the customer.  

Some manufacturers found PPT confusing, as they were not sure whether the plastic packaging components they produced would be classified as taxable packaging. For example, a manufacturer noted that the same material that they used for carton windows for food products was also used to laminate restaurant menus. However, in their view the latter was not liable for PPT. 

“We sell film for carton windows, so when you look through… a fish pie in a freezer, you know the little window? That could be our material. That is definitely plastic packaging. However, our film is also used as a laminate for paper and board, like a menu in a restaurant. As part of the Plastic Packaging Tax, that is not classified as plastic packaging. Do you see the difficulty here?” (Manufacturer, manufacturing [food packaging]) 

Some businesses opted to pay the tax on all their plastic packaging components regardless of recycled content. This was either because their international parent company did not want them to collect data, or because they felt they could not trust information provided by their suppliers (for example, due to different understandings of what constitutes recycled plastic or language barriers). These businesses were all importers. 

“It’s one of the challenges with working with a global company is that the regulations in the UK might not be the same regulations in the US or in other countries, so my requirements for what I would like to see in the data are a small consideration.” (Manufacturer, telecommunications) 

“What they came with was a certificate to show it was 100% recycled plastic, but we haven’t based any of our tax returns on that. We’ve just been declaring it as if it’s not 100%, or there’s no recycled content.” (Importer, manufacturing [plumbing]) 

Other businesses were worried that lacking sufficient information or evidence (such as certification) could lead to being found non-compliant, and as a result had their products classed as non-recycled. 

“We know that our products, the materials, it’s either 100% recycled, or it’s virgin… if we haven’t got any certification for it, even if our supplier says its recycled, we will put it in as virgin.” (Importer and manufacturer, textiles)  

5. Plastic packaging content: virgin vs recycled plastic  

5.1 Plastic packaging strategy 

For many businesses, PPT prompted changes in the type of plastic packaging they imported and manufactured. Those businesses that had changed their strategies — by either increasing the percentage of recycled plastic or reducing plastic usage altogether — generally viewed PPT as an accelerant of these changes, rather than the sole cause.  

There were consistent factors informing and shaping businesses’ strategies in response to the tax, regardless of whether businesses had made changes to the content of the plastic packaging they imported or manufactured. These factors were often interconnected, with many businesses mentioning one or more of them. The following sections discuss these issues in detail.  

Cost 

Businesses frequently cited cost as the key driver behind their decision-making processes on plastic packaging. A key consideration was the direct cost of paying PPT on the plastic packaging they imported or manufactured. Often, businesses described weighing up the cost of making changes to their supply chain or products versus the cost of paying the tax, with PPT acting as the incentive. 

“We’ve been looking and trying to find ways of doing it, and there isn’t really any substitute that’s more cost-effective than plastic.” (Importer, wholesale and retail) 

This often introduced another cost aspect: the cost of recycled plastic compared to virgin plastic, with recycled plastic generally found to be more expensive. Some businesses were determined to minimise how much tax they were liable for, wherever possible. For others, the cost of paying the tax was less than the cost of changing their practices or too minor to be of concern.  

Quality 

Quality and industry-specific regulations were also a key factor informing businesses’ decisions on plastic content. Businesses that observed little difference in the quality of recycled plastic packaging products relative to virgin plastic were more likely to report having made changes or express a willingness to change. Conversely, when businesses perceived the quality of recycled plastic packaging to be inferior to virgin plastic packaging, they generally refrained from making changes. 

Quality was a particularly important factor for businesses interviewed who operated in industries with more stringent regulatory requirements, such as pharmaceuticals and food. These businesses were more likely to report difficulties in being able to change from virgin to recycled plastic, because products with higher recycled content often did not meet the required standards. This could relate to safety, cleanliness, or product performance.  

“The problem with recycled is that it’s not as, shall we say, clean and therefore isn’t approved for use in contact with either food or something that’s going to go on your face.” (Importer, wholesale and retail [cosmetics]) 

Customer preferences or demand 

Customer preferences or demand was often reported as the most important consideration by manufacturers. Some businesses noted a limited demand from their customers for higher recycled plastic content, while others reported the opposite, especially when dealing with large B2B clients who had specific sustainability commitments to meet (detailed in the following section). Some businesses selling plastic packaging noted that whilst they offered products with higher recycled plastic content, customers did not purchase them, with one manufacturer saying this was due to the appearance of recycled plastic products. However, appearance was not a factor considered by all businesses. Some highlighted that the plastic packaging they imported was solely to package their own products for transit and storage, or was only used in the supply chain process, and was therefore not seen or considered by their customers.   

Sustainability and ESG commitments  

ESG considerations were highlighted by some, but not all, businesses as contributing towards their current decisions on plastic packaging content. Some businesses said that this was a key driver behind their decision to reduce virgin plastic content or plastic packaging as a whole, with one business noting that their new approach was actually more expensive than before. More often, however, businesses tended to see this as desirable but not essential, with their decisions ultimately governed by cost, quality, and customer preferences. Nonetheless, many businesses shared the view that the objectives of PPT — reducing the amount of virgin plastic packaging and waste — aligned with the broader trend toward sustainability, and understood these considerations to be important, even if they were not a primary motivator for their own business decisions.  

5.2 Changes in decision-making around plastic packaging 

The changes described by businesses fell into 3 categories that will be discussed in turn in the following sections: 

• businesses who had decreased virgin plastic or increased recycled plastic content in packaging or both 

• businesses who had not made any changes in their plastic packaging practices 

• businesses who had made changes, but had not changed the proportion of virgin and recycled plastic (for example, the overall volume of packaging increased or decreased, but its recycled content did not) 

Across these 3 categories, interviewed businesses were relatively evenly spread between those who had made changes, and those who had not.  

Some businesses were more likely to make particular changes than others. Businesses that imported or manufactured the most plastic packaging, regardless of size, often reported changes. Micro, small or medium businesses were also more likely than not to have reported changes. There were minimal differences in the experiences recounted by manufacturers compared to importers. 

Businesses that decreased virgin plastic use, increased recycled plastic use, or both 

Businesses that reported having increased the proportion of recycled plastic in their plastic packaging often said that this had been implemented in the lead-up to the introduction of PPT. 

As previously noted, the scale of change differed across businesses’. Some sought for their plastic packaging to meet the 30% requirement and did not aim to reach a higher percentage. Others, more often driven by considerations around sustainability, reported they had gone further and wanted most, if not all, of their stock to be made from as high a recycled content as possible.  

“We’ve made quite a significant dent on it [recycled plastic content in packaging] by nearly doubling it. So, we’ve made some good progress, but I’d say there’s still some work to do.” (Importer, wholesale and retail [catering]) 

The scale of change also depended on businesses capabilities. For example, a business which both manufactured and imported said that they did not have the technological capability to introduce recycled plastic feedstock into the business’s manufacturing systems. Another, which imported packaging for perfume bottles, had made some changes but could not increase recycled content in other parts of their packaging because they had already imported enough for the next few years of stock. Finally, while businesses in industries like food and pharmaceuticals reported having made some changes, they tended to feel they had made all the changes they could. Further changes would require shifts in regulations or in what it was technically feasible to do with recycled plastics. 

“The grading that [film wrap for products] has to operate to is actually higher than food, to get recycled plastic at 30% for that use is nigh-on impossible.” (Importer, wholesale and retail [cosmetics]) 

When asked why they had made changes, it was evident that PPT was a key driver. PPT influenced decisions to change in 2 ways which often overlapped: more often, this took the form of not wanting to be liable to pay more PPT than was necessary.  

“We’re maybe paying between £3,000 and £6,000 a quarter on PPT […], so it’s a significant amount which we’d rather not have to pay. It’s just finding a way of avoiding paying PPT.” (Importer, wholesale and retail [food supplier]) 

The second way PPT influenced decisions was through nudging businesses further along a path they were already on. A few mentioned that other countries they traded in already had PPT-type policies, or were planning on introducing them, reinforcing the sense that this was the broader direction of travel. Many felt that PPT had accelerated changes they had already planned to make anyway, reflecting these wider trends, existing sustainability commitments, or shifting consumer preferences. In this vein, sustainability and ESG targets and customer preferences tended to be secondary drivers for many, although a few described them as their primary motivator.  

Further, product quality was often a decisive factor when increasing recycled content for many businesses. If performance matched or was better than the virgin plastic alternative, switching to recycled plastic was feasible. If the quality was noticeably worse, they would have struggled to switch. None said that plastic packaging with higher recycled content was better quality than the virgin alternative, even if the only difference was aesthetic rather than functional.  

Businesses that made no change to volume of recycled plastic in packaging  

A few businesses reported no change in the recycled content of the plastic packaging they imported or manufactured. There were 4 primary reasons for this.  

Firstly, the most common reason was cost. These businesses often explained that their cost-benefit analysis had indicated that it would be cheaper to pay PPT on all the packaging they imported or manufactured than to change their processes or invest in new products with higher recycled plastic content.  

“We reached out to our suppliers and said, ‘Could you change?’. That was then met with, ‘Yes, we can but it will cost you this.’ So then, the decision was taken that actually, we’ll just leave it as it is.” (Importer, manufacturing) 

For some, this was an easy decision to make. For example, one interviewed large business imported very little plastic packaging, with their volume only just more than the 10-tonne minimum. For them, the need to shift for a small charge was simply not worth it. This was a common theme amongst large businesses that had not made changes: the charge was too small to justify changing their practices. 

Secondly, some businesses said they could not practically make changes to their plastic packaging products. They highlighted primarily that plastic packaging made with higher proportions of recycled plastic was of lower quality than that made with virgin plastic, and in sectors such as pharmaceuticals and food packaging, recycled plastic would not meet the necessary regulatory safety or quality standards.  

“It would take [our suppliers] longer to find a substitute. It’s key that the packaging doesn’t deteriorate over time within the expiry period. So, it’s got to be robust replacement packaging that they might want to use.” (Importer, wholesale and retail [pharmaceuticals])  

Inferior quality of recycled plastic products was also cited by a few businesses that worked in other sectors, without such regulations. These businesses said they had tested such alternatives but found their appearance or performance unsuitable. Additionally, some businesses said they did not want to switch from well-established, long-standing suppliers who could not make necessary changes to their products. 

Thirdly, a few businesses asserted that they did not need to make changes, as the products they imported already met the 30% threshold. All were importers, and typically said they had only discovered this when they had asked suppliers to confirm recycled content. 

The fourth reason was customer preference. Only a few businesses reported no change in their approach because there was limited customer demand to do so. A manufacturer of custom-made products said that they offered options with higher recycled plastic content, but customers never selected them as they tended to be more expensive than the virgin plastic options. 

“[Customers] are given the option to have recycled content, which tends to change the colour of the material. None of our packaging is consumer facing, so we’re not talking about bottles for juice drinks […], it’s fundamentally material that gets punted around the supply chain […]. They’re given the option, do they want recycled content or not? And if they choose not, which they often do, then they pay PPT.” (Manufacturer, manufacturing [packaging]) 

Finally, as noted in section 4.2 (Approaches to PPT), a few businesses said they had not made significant changes, and paid PPT on all plastic packaging because they felt they lacked sufficient or trustworthy information from suppliers about recycled content. A few suggested they were unsure if they could trust that requested changes would be adhered to by suppliers, given geographic distance (these suppliers were often outside of Europe) and their limited oversight of manufacturing practices.  

Businesses that made other changes in their plastic packaging decision-making 

A few businesses reported changes not covered earlier in this section. Instead of reporting changes to the content of plastic packaging, they had adjusted the volumes of plastic packaging they imported or manufactured in the UK.  

Firstly, some said that business growth or decline had changed the overall volume of packaging they imported or manufactured. For example, a manufacturer said that changes in their business’ focus over the past years in response to market conditions meant they were manufacturing less plastic packaging than before. Also, an importer noted that although they had increased recycled plastic content in their packaging, they had also experienced significant growth since 2023, meaning that the total amount of virgin plastic they used was actually likely to have increased. 

“Sales are going up, that’s why I’m importing more.” (Importer, wholesale and retail [food packaging]) 

Secondly, a few businesses, particularly those that were more driven by sustainability, said they were trying to move away from using plastic packaging entirely. They reported making an effort to decrease the volume of plastic packaging they used, and investigating alternatives. For example, a business said they were now using paper-based tape rather than plastic. For these businesses, the main change was reducing plastic use, rather than trying to increase recycled content. 

“With regard to plastic, the push is to reduce that across the piece, but we haven’t made any moves towards using more recycled.” (Importer, wholesale and retail) 

6. Impacts of PPT on businesses 

6.1 Types of PPT impacts on businesses 

While reactions and responses to PPT varied between businesses, the impacts that they cited were consistent and fell under 2 distinct themes: the cost of paying PPT itself, and the indirect costs of administering PPT. 

Typically, the impact of PPT depended on businesses’ size. Micro and small businesses tended to report longer-lasting negative impacts or anticipated greater impacts in the future. In contrast, large businesses more often had systems to manage tax payments efficiently, and large enough profit margins to absorb a greater level of cost. 

The cost of paying PPT 

The most immediate and obvious impact of PPT was simply the obligation to pay the tax, introducing an additional expense. However, many businesses perceived the cost as manageable.  

“It’s a cost of doing business for us.” (Importer, service industry [catering]) 

“It’s probably less than 1% of additional cost [from suppliers…]. I don’t think it’s had a massive impact financially.” (Manufacturer, pharmaceutical and medical products) 

As noted previously, some businesses did not have to face this added cost, as all their products met the 30% recycled content threshold and so were exempt from the tax. However, very few businesses said this was the case for them. 

Views on the impact of these added costs tended to be influenced by the cost in relation to the business’s turnover, rather than the actual amount of tax paid. As noted in Chapter 5, a multinational business with a large annual turnover was unconcerned with how much PPT they were paying as the cost impact was negligible for them. For other businesses, the ratio of cost to turnover was more significant, with a few businesses saying the tax had further squeezed their already tight profit margins. 

“The amount of tax, in terms of hitting our revenue, it’s not a big consideration […]. £20,000 a year, it’s a small drop compared to our profit and loss. So yes, it doesn’t make a blip really.” (Importer, telecommunications) 

“We’re maybe having to pay between £3,000 and £6,000 a quarter on [PPT], depending on how much we’ve imported in that particular quarter, so it’s a cost to the business of probably around £15,000 a year. So, that’s a significant amount which we’d rather not have to pay.” (Importer, food and retail services) 

Some businesses, but not all, passed the costs onto their customers. Those that did typically sold to other businesses, or incurred packaging costs that were separate from the end product. For example, an importer passed on the costs of packaging which was only used to protect products while they were being transported to their purchasers. The decision to pass on costs was not solely influenced by the financial impact, and even businesses that considered the costs insignificant sometimes chose to pass them on to customers.  

Businesses that said they did not pass the costs on gave varied reasons for this. For some, the cost was not substantial enough to feel justified in doing so, while others said they were worried that adding costs to their products could impact their competitiveness. One business said their customers would not accept them passing the costs onto them and required them to absorb these costs. 

Indirect costs of administering PPT 

Aside from the direct cost of paying the tax, all interviewed businesses noted the indirect costs associated with PPT. These indirect costs primarily consisted of the time and resources required to compile information for PPT returns. 

“It’s the additional data capture, additional database fields that need updating, checking, additional reporting.” (Importer, manufacturing [cosmetics]) 

Businesses described this as having particular impact in the months leading up to PPT first being implemented, or submitting their first PPT return. Many said that in this period they spent considerable time, and in some cases money, on developing efficient systems to generate reports for the plastic packaging that was imported or manufactured. This included:  

• auditing current imports and manufactured products, checking weight, volume, and frequency  

• establishing the recycled content of these products, and assessing whether this could be increased above the 30% threshold  

• setting up a system — either via accounting software or Excel, to be used across their importing or manufacturing process  

Some businesses explained that these metrics were added into other, existing accounting systems, particularly if the plastic packaging they imported or manufactured was sold as a product. Others said that a whole new system needed to be set up, tracking the amount of each type of plastic packaging product they imported, and its recycled content. Often for importers these metrics relied on suppliers providing information, which required extra time spent communicating with suppliers. Some businesses said they simply passed the task onto their accountants or subcontractors who handled tax returns for them.  

A few businesses said they had not set up dedicated systems and instead needed to either conduct time-consuming audits for each tax return or estimated based on previous audits. These were generally smaller businesses that lacked the experience and capacity to establish these systems. These businesses reported the largest impact in terms of indirect costs, as the challenge had continued since PPT was introduced in April 2022. In contrast, the businesses with the skills and resources available to set up dedicated processes tended to report that tax returns had been easy since their initial time investment. 

“The obvious impact is the administration around it in terms of obtaining the data that we need for the quarterly returns and making sure we have all of that information accurately, which is quite challenging when we don’t have perhaps the sophistication of the systems that other, bigger companies might have.” (Importer, wholesale and retail [cosmetics]) 

As highlighted previously, a small number of businesses had not set up systems to track the percentage of recycled content and simply paid the tax on all the plastic packaging they imported.  

Businesses also reported indirect costs related to changes in their plastic packaging strategy, product range, and purchasing decisions. Changes in plastic packaging strategy included, for example, researching ways to move away from plastic packaging as a whole, and potentially switching to alternative, more expensive materials. Additionally, some businesses noted that they had accrued costs through investing in new or different products with higher recycled content, or paying more for products that met the 30% threshold. In many cases they reported that these costs were approximately equal to how much they would otherwise have paid in tax, although some were unsure about this.  

6.2 Additional factors and their impacts on plastic packaging 

Some businesses highlighted other factors that had affected the cost of manufacturing or importing plastic packaging since 2022. It should be noted that not all businesses highlighted additional costs aside from PPT. 

Extended Producer Responsibility for packaging (pEPR) 

As highlighted in the Glossary, pEPR is a UK government regulation that requires packaging producers to fund the cost of managing packaging waste. Many businesses said this regulation would have a major impact on them, with some saying it was a key factor influencing their plastic packaging strategy. They viewed pEPR as having, or expected it to have, a much greater impact than PPT and it was of more concern to them. Some felt that pEPR and PPT meant they had to pay 2 taxes on the same product.  

General cost increases  

Some businesses also pointed out the general rise in costs since 2022. For some, this was brought up readily without prompting, while others mentioned it only following some probing. For the latter group, the rise in costs, while steeper than they had experienced before, was perceived as part of routine business operations.   

“Everybody is increasing their costs because their costs are, obviously, going up, so then they have to increase their sale price. So, the cost of raw materials is going up. Just, in general, it’s more expensive.” (Manufacturer, manufacturing [consumer goods and foodstuff packaging]) 

Businesses particularly highlighted increased costs of freight, shipping, and wholesale goods from suppliers. A few manufacturers also highlighted that the substantial increase in energy costs had been a major challenge. These increased costs forced some businesses to raise prices, ultimately resulting in, for some, loss of business. Additionally, one business noted the burden of increased staff costs. 

7. Possible future changes to PPT 

This research also aimed to explore how businesses may respond to future changes in PPT, particularly if the 30% threshold or cost per tonne changed. To explore this, businesses were given the following 3 scenarios for discussion during interviews: 

1. PPT rate has to date increased annually in line with CPI inflation, and has been applied at the 30% threshold. If this continued, how would your business respond?  

2. If PPT was not in place, do you think your business would maintain your current practices?  

3. If the government increased PPT cost per tonne, or the 30% threshold, how do you think your business may respond?  

Reactions to each of these are discussed in turn in this section.  

7.1 Scenario 1: PPT rate continues to increase annually in line with CPI inflation 

Many businesses said that in this scenario they would maintain what they were currently doing, acknowledging and accepting that costs naturally rise over time. This view was shared consistently by businesses of various sizes and sectors. One business noted that this would not affect them, as long as the 30% threshold stayed the same.  

“What we do as a business is just stay close to the market, see what’s available, research it, as soon as anything is available we’ll conduct line trials at our own cost.” (Importer, wholesale and retail [cosmetics]) 

Some businesses stated that they would continue with planned increases in the recycled content of their packaging, driven either by costs of paying PPT, or by sustainability goals. For some, this shift would involve sourcing more materials from UK suppliers rather than from abroad. However, a few businesses expressed concern about the limited availability of recycled plastic. They argued that increasing the proportion of recycled content could be ineffective without stronger infrastructure to collect and process materials for recycling. 

A few said that while they could absorb increased costs to an extent, they would reach a point where this was no longer viable and additional costs would have to be passed onto consumers. This was a significant concern for some businesses under financial pressure, as well as those subject to pEPR. Some believed that there could be a risk of subsidiaries of overseas companies pulling out of the UK market if the cost of plastic packaging increased significantly.   

7.2 Scenario 2: PPT is removed 

Many businesses who had made changes said that if PPT were removed, they would not change back to previous practices.  

Many companies in sectors with strict health and safety regulations, such as food, drink, and medical supplies, stated their practices would remain unchanged because they were unable to use recycled plastic for their primary packaging. For these businesses, the availability of suitable, food-grade or medical-grade recycled material was the main barrier, not the tax. 

“Until somebody can come along and say, ‘We can guarantee you X tonnes of absolute grade PCR,’ we would certainly probably not think about it.” (Manufacturer, food packaging, pharmaceuticals and medical packaging) 

Companies that supplied products directly to major retailers, regardless of the product sector (such as food, electronics, or clothing), frequently cited customer pressure as the primary reason they would continue their sustainable practices. They often viewed retailer demand as a more powerful driver than the tax itself. Some businesses mentioned that if PPT were to be removed, they would reduce their prices in line with cost savings, and another business mentioned that it would alleviate their financial burden, as they already paid for the pEPR. 

“I don’t think it would change our processes as such. Cost everyone a bit less money at the end of the day but, no, it wouldn’t change our processes.” (Importer, sales and distribution) 

“Some of our customers are really pushing on a planet plan… saying to us, ‘Move away from plastic packaging because it’s the right thing to do for the planet, for the environment, for all of us to live healthier lives’.” (Importer, food and retail services)  

Companies that supplied to the public healthcare sector pointed to their customers’ own sustainability targets as a key motivator behind continuing to incorporate recycled plastic where they could within sector requirements. In particular, a polythene manufacturer for the healthcare sector said their focus on sustainability would continue due to NHS sustainability targets.  

“Because, a large portion of our UK business is National Health Service (NHS), and the NHS has sustainable targets as do we, as a business.” (Manufacturer, manufacturing [healthcare and pharmaceuticals]) 

Sustainability had also become a stronger driver than PPT alone for many businesses, and they were committed to continuing their efforts to reduce environmental impact, regardless of the tax. This was especially true for larger organisations that pointed to high-level corporate strategies, such as net zero goals, or mandatory environmental reporting, which made PPT a secondary factor.  

“We are under constant pressure to have a sustainability report, and that’s what spells out what the business’s strategy is for reducing its carbon footprint and being more sustainable, more eco-friendly.” (Importer, wholesale and retail [healthcare and cleaning]) 

Some SMEs also noted that they were driven by sustainability concerns.  

“Everybody’s trying to be green, and it’s a way of doing it that’s not too onerous. Like with the plastic containers that are 90% [recycled], you know, everybody’s been encouraged to recycle what we can, and I think most people are on board with it now.” (Importer, construction) 

Others were more focused on the financial and administrative benefits of removing PPT.  

“Yes, the money is relatively negligible but frustrating. If it wasn’t in place then yes, we would get a lot of time back that’s pure admin at the moment.” (Importer, food manufacturing) 

Lastly, some noted their customers’ price sensitivity, and suggested that prices could be lowered without the tax.  

A few businesses noted that without a direct financial incentive, they did not expect their business or others to make further changes (such as increasing recycled content) or any change (if they had not done so before). As such, the removal of PPT might slow down the pace of change, as businesses would no longer have this financial incentive to reduce virgin plastic usage.  

7.3 Scenario 3: PPT cost per tonne or 30% threshold increases 

In response to a scenario where the PPT cost per tonne or 30% threshold increased, whilst businesses’ reactions depended on how much these would increase by, many thought the impact would be negative. 

Increase to 30% threshold 

Responses from businesses largely varied depending on their current tax position. Businesses whose plastic packaging was already above the 30% threshold were mostly unconcerned, though some anticipated additional administrative burden to certify the percentage of recycled plastic content in their packaging.  

“Now, literally what we have in terms of certification is it doesn’t give a percentage of recycled, it just says it’s more than 30% recycled. I don’t know if that’s 31% or 75%. So, say hypothetically it went to 50%. For us, it’s then going back by supplier and seeing what the effect is.” (Importer, wholesale and retail [service industry])  

Those who used 100% virgin plastic saw the change in the threshold as irrelevant.  

“The threshold doesn’t really affect us at the moment, because none of it’s recycled, so it doesn’t matter 30% or 50%, we still wouldn’t qualify.” (Manufacturer, pharmaceutical and medicine) 

However, responses varied among businesses that were below the 30% threshold but aiming to meet it. One business said impact would be minimal, as they had planned for the increase, and customers expected it. Others mentioned barriers related to regulations, performance, and availability of materials.  

Similar to the previous scenarios, businesses related to food, beverage and medical sectors were concerned about raising the 30% threshold due to strict requirements for their packaging. They again highlighted issues with availability of food-grade recycled materials and the physical performance of packaging with higher recycled plastic content. A food importer noted that it could take “several years” to change packaging, especially for food-contact items that must be safe, properly sealed and leak proof. Other manufacturers noted similar concerns, stating that with more recycled content, packaging might not be able to withstand the weights during transportation, due to reduced strength of the plastic.   

“Now, the more you increase the recycled content, the weaker the hood becomes or, yes, the hood itself becomes more expensive, because you’d have to use stronger plastic to compensate for the recycled content. So, our packaging could end up costing more, irrespective of the tax.” (Importer, manufacturer [oil and gas])  

“Say if it was 40% and the bag would fall apart, the price of the bag would just have to increase with plastic packaging tax… We wouldn’t be able to add more recycled content.” (Importer, retail and sales) 

Industrial manufacturers also noted similar concerns around packaging performance, as well as the prohibitive costs of using more recycled content.   

“Some of the recycled material that we’ve had in the past is not the best of quality, so that would be the main issue with the new suppliers if we were looking at new suppliers.”

(Importer, retail and sales) 

“So, until [recycled plastic] reaches a critical mass, where the price comes down based on the volume that they’re actually using, they tend to be prohibitive. So, it’s the marketplace that needs to change.” (Importer, retail and sales) 

Both manufacturers and importers also mentioned concerns around their overseas suppliers and a lack of control, as well as auditing. For example, some businesses raised concerns about the validity of recycled content claims from overseas suppliers. Another business mentioned their reliance on overseas suppliers to meet recycled content requirements.  

“I think you’d just see a massive influx of cheap rubbish… And increasing the domestic rate of tax for non-recycled content polymer just hands further benefits to people that are willing and able to be, probably, shall we say, bend the rules slightly.” (Manufacturer, manufacturing plastic packaging) 

“We’re at the mercy of what we can get our hands on or we can get.” (Importer, wholesale and retail [food]) 

Nonetheless, some businesses noted that they would likely feel more encouraged to meet the threshold if it increased, and thus to achieve their sustainability goals.  

Increase to cost per tonne 

Many businesses who were not already doing so said they would likely need to start passing costs onto customers, especially if the cost per tonne were to increase faster than the CPI. Businesses also often predicted a 6 to 12 month adjustment period for redeveloping their plastic packaging, as well as adjusting their internal processes. 

Several businesses were worried about losing competitiveness and were concerned about negative effects on their local economy, noting that small businesses may struggle against larger businesses that may be better able to absorb costs. This risk was especially pertinent for SMEs in highly competitive industries. 

“Price, especially nowadays, is a big driver for people. It’s getting more and more cut-throat in this business.” (Manufacturer, wholesale and retail) 

“Increase the price and then that will, in turn, increase the cost to the retailer. But, if it went up to a ridiculous level, that’s where, as I say, the company may decide that trading in the UK is just not worth it and just concentrate on supplying to the rest of Europe where it’s not so much of an issue.” (Importer, wholesale and retail [food products])  

In contrast, larger businesses that used relatively little plastic packaging said that increases to the cost per tonne would have minimal impact, unless the rise was substantial. 

8. Submission of PPT returns  

8.1 Experience of submitting PPT returns 

Many businesses reported that their experience of submitting PPT returns had changed over time. Initially, businesses often reported needing to set up systems to produce reports which would be used for PPT returns. These systems were either entirely new or were integrated into existing systems that recorded the volume of certain products or packaging being imported. These initial steps to set up the systems were nearly universally reported as being time-consuming early on, with businesses emphasising the administrative burden of these. 

“I feel that it [their processes] have been optimised and streamlined, and that was done pretty much in the first year. So, it’s quite an easy thing, to submit our PPT.” (Both manufacturer and importer, manufacturing [textiles]) 

There were some exceptions to it being perceived as mainly time-consuming at early stages, however, some businesses noted the systems they had in place were less based on exact weights and proportions of products and were therefore less time-consuming to establish. A few said they had conducted an audit at the start of PPT, and since then had estimated the volume of plastic packaging on which they needed to pay the tax. Additionally, some smaller importers noted that they did not have the capacity to set up systems that tracked their inventory and the weight of plastic packaging they imported, meaning that the process (manually inputting inventory, or taking averages) had continued to be time-consuming for them.  

In terms of submitting the returns themselves, while for the most part businesses said the process was fairly quick, some highlighted specific challenges. For example, one importer felt that there was a disproportionately challenging burden of proof required to demonstrate whether plastic packaging products had remained in the UK or been exported. They highlighted the need to “evidence the export by providing physical documentation.” 

A few other businesses felt that there were instances where the guidance on the UK government portal was unclear, making the process of submitting at least the first few returns more challenging.  

“I remember the first couple of times I made submissions on the .gov portal, I was thinking “Yes, what does that mean? What does this mean?” So, I think the clarity could be improved a little bit on the submission portal.” (Importer, manufacturing [technology products]) 

Some of these businesses had submitted queries that had not yet been resolved. For example, an importer who imported a product which would eventually be exported, but not within the 2-year time limit PPT has for exports (for example, they may import bulk plastic components of wider packaging for products but not use these for 3 years). They noted that this was difficult for them to track, and meant they were unable to get credit back, but had not been able to speak to anyone in HMRC about this challenge.  

Some businesses reported that they did not understand exactly what was meant on the government portal and could only obtain general guidance that was not directly applicable to their products. This was particularly challenging for smaller manufacturers making niche products, when determining whether their products should be considered plastic packaging. This complicated their experience submitting returns, as businesses were unsure about what should be included. 

8.2 Suggestions for improving PPT return submission 

Many businesses had positive experiences submitting PPT returns and found the process straightforward. However, several suggestions to improve the submission process were brought up, including:  

• aligning PPT return deadlines with Defra’s half-yearly pEPR deadlines to reduce the administrative burden on businesses  

• providing reminders for submission deadlines 

• streamlining the process of netting imports and exports of plastic packaging 

• including a function for calculating the tax in accounting software (such as QuickBooks), to reduce the risk of errors 

Some businesses also suggested that they would like HMRC to provide clearer guidance on certain aspects of the tax return process, including specifically: 

• how to do the calculations 

• how to submit when they have packaging that meets the 30% recycled content threshold 

• what specific material can count towards the recycled content (for example, different types of film, such as oriented polypropylene versus polythene) 

• more clarity for B2B businesses who used plastic packaging only to transfer and store goods, rather than for consumer products (for instance, by providing case studies) 

• claiming tax credit on re-exported goods 

• the type of evidence they need to provide to prove the plastic content of their imports 

Additionally, one business mentioned that they sometimes found the wording on the HMRC portal hard to understand, and suggested adding some pop-up guidance notes to help with clarity. 

While one business mentioned that they liked the current way that data is entered onto the portal, another said that they would like a system that automatically retrieves relevant information and uploads the data to the government portal. They suggested that this could be similar to the VAT return submission process in which software is used to retrieve information from the SAP accounting programme.  

Some asked for a mass balance approach to be adopted. A business believed that many companies already measured using mass balance to simplify the calculation. Otherwise, there were no further suggestions with regards to the weighing methods. 

“Yes. Mass balance, I think we’re nearly in a position where one of our suppliers could be able to provide us with a certificate on a mass balance approach.” (Manufacturer, wholesale and retail [food]) 

9. Conclusions 

This section brings together conclusions against the original research questions that this research set out to answer. 

9.1 How have businesses changed their use of virgin and recycled plastic in packaging since PPT was introduced in April 2022, and what has driven these changes? 

Overall, decisions on plastic packaging were driven by the following key factors: cost, quality, customer preference, sustainability goals, and industry-specific regulations. Technological capacity (or ability to manufacture specific products with current processes) was also mentioned as a factor by a manufacturer. 

Some businesses reported that they had increased recycled plastic content. Changes consisted of reformulating packaging materials, redesigning packaging formats, and collaborating with suppliers to source recycled plastics. In some cases, they had even changed their suppliers. These businesses were primarily motivated by costs and not wanting to pay PPT, and therefore the tax acted as the catalyst for making changes. Some businesses said that customer preference and sustainability goals (whether their own or that of the end customer) had influenced their behaviour towards using recycled plastic. 

Businesses that had not changed the virgin and recycled plastic content of their packaging often said that they were unable to do so, either because it was cheaper to pay PPT than to develop a new product, or because they felt products with higher recycled content were of lower quality, impacting sales or product safety. Some large businesses reported that the tax was too small a charge for them to worry about. Customer preference played a role for some, such as a manufacturer who said their customers preferred virgin plastic packaging. 

In addition, some businesses reported changes in overall volume of plastic packaging, as well as changes related to moving away from plastic packaging in general as part of sustainability goals. 

9.2 What type of impact did PPT have on businesses? 

The most significant impact of PPT was cost — the direct cost of having to pay the tax and the indirect cost in time and resources spent in setting up the systems and compiling information for PPT returns. Whether these costs had had a notable impact on the business was mixed, with some noting negligible impacts. This was especially the case for larger businesses that could more easily absorb the additional cost, which they described as minimal compared to their overall revenue. Some smaller businesses were more heavily impacted by the additional costs and found gathering the data for returns time-consuming on an ongoing basis. This contrasted with other (typically larger) businesses for whom this process became much simpler after they had set up their systems. 

The research identified some businesses who paid PPT on all imported plastic packaging, as they were unsure whether it met the 30% threshold. This behaviour was either driven by a lack of interest in collecting data for PPT compliance, or because their information on recycled and virgin plastic content was based on estimates about which they were not entirely confident. Some importers paid tax on all their products because they did not trust the information from their suppliers or were worried about not having sufficient evidence. 

9.3 How might businesses respond to changes to the PPT rate or 30% threshold?  

When considering hypothetical future changes to the tax, businesses broadly said that they would not go back to previous practices, but that future increases in PPT rate or threshold would likely have a negative impact. However, some businesses said they would have more capacity to make changes, such as passing costs on to customers or increasing recycled plastic content, than others. 

Businesses who had made changes said that they would not revert to previous practices — in part due to sustainability, but primarily because changing back would be too burdensome. Some said that they would continue to increase the recycled content of their packaging regardless, while others noted that without a direct financial incentive, they did not expect that their or other businesses would make (further) such changes. 

9.4 What are the challenges in submitting PPT returns, and how can HMRC help companies address these challenges? 

Many businesses felt that the ongoing process of submitting PPT returns had been manageable and largely straightforward. Nevertheless, some businesses still found submitting PPT returns difficult, namely small businesses that did not have established and efficient measuring systems in place, or sufficient resources to implement these systems.  

Key practical improvements that were suggested included aligning PPT returns with pEPR deadlines, streamlining exporting and importing processes, and providing clearer guidance and communication from HMRC. Some businesses said they would welcome the introduction of a mass balance approach to track recycled content more easily. 

10. Technical annex 

This technical annex provides an overview of the research approach taken for this study. 

10.1 Research method 

The method used for this research was qualitative in-depth interviews. These were conducted via Microsoft Teams or by telephone, and lasted 45 minutes to an hour. 

Altogether 50 interviews were carried out between 20 May 2025 and 9 July 2025 with UK businesses that were registered in HMRC’s PPT database.  

Ipsos and HMRC developed 2 semi-structured discussion guides to ensure businesses were asked questions and follow-on probes that were relevant to them: one for manufacturers and one for importers.  

A pilot was carried out at the start of the fieldwork to test the discussion guides and allow for any changes that would be needed.  

10.2 Recruitment 

The HMRC-provided sample included details on organisation name, contact name, contact details, and key characteristics relevant to the research. This included whether they were an importer or manufacturer (or both), when they first registered and their most recent return, and total tonnage of plastic packaging in returns comparative to the rest of the sample. 

In the first instance, the whole sample were emailed to notify them about the research and were offered the opportunity to opt in or out of it. After a week, recruitment partners Patton-Williams Ltd. (PWL) proceeded to contact all businesses in the sample who had not requested to opt-out of the research.  

An incentive of £50 as a charitable donation or a shopping voucher was given to each participant to thank them for their time.  

10.3 Participant profiles 

A recruitment screener was used to ensure diversity across the following business characteristics:  

• business type:

  • manufacturer

  • importer

  • both

• relative plastic tonnage by weight:

  • smallest 20%

  • second smallest 20%

  • middle 20%

  • second highest 20%

  • highest 20% 

• country:

  • England

  • Scotland

  • Wales

  • Northern Ireland 

• length of PPT registration:

  • those who registered in the first year of PPT (before April 2023)

  • those registered in the second year of PPT (in or after April 2023) 

Minimum quotas were used to ensure a diverse range of businesses were spoken to, with PWL able to target recruitment based on characteristics present in the sample as well. The full breakdown of participant profile targets and achieved profile is detailed in the following tables.  

10.4 Participant profile targets and quotas achieved 

Business type 

Characteristic	Minimum quota	Achieved interviews (of 50 total)
Manufacturer	15	14
Importer	35	35
Both	no data	1

Region 

Characteristic	Minimum quota	Achieved interviews (of 50 total)
England	Mix and monitor	41
Scotland	Mix and monitor	4
Wales	Mix and monitor	2
Northern Ireland	Mix and monitor	3

Relative plastic tonnage by weight 

Characteristic	Minimum quota	Achieved interviews (of 50 total)
Smallest 20%	Mix and monitor — roughly even split	10
Second smallest 20%	Mix and monitor — roughly even split	8
Middle 20%	Mix and monitor — roughly even split	10
Second highest 20%	Mix and monitor — roughly even split	11
Highest 20%	Mix and monitor — roughly even split	11

Length of registration 

Characteristic	Minimum quota	Achieved interviews (of 50 total)
Before April 2023	20	33
On or after April 2023	20	17

10.5 Research ethics 

Participants received a full and clear explanation of the purpose of the research. Recruitment materials were designed to ensure participants were aware that their involvement was voluntary and that they could opt out at any stage of the process. 

Anonymity has been ensured in the findings, so that participants cannot be identified. Participants were reassured that participation would have no impact on their relationship with HMRC or their entitlement to support. 

10.6 Analysis  

All interviews were audio recorded, listened back to and interview notes written up in an analysis grid to examine the content and identify recurring themes. Themes, patterns and trends were examined against key characteristics of businesses, particularly: whether they were an importer or manufacturer, their business’s size, whether they identified having made any changes in their plastic packaging decision-making processes and what these changes were, and the business’s sector. 

Group analysis sessions were then held mid-way through the fieldwork period and following completion of all interviews. These sessions included discussions to determine key themes relating to each research question and compare and contrast interviewer findings. HMRC colleagues were invited to observe the analysis sessions.