Preparing to use a mass balance approach for Plastic Packaging Tax
Find out how your business can get ready to use a mass balance approach to account for chemically recycled plastic for the Plastic Packaging Tax.
From 1 April 2027, you must use a mass balance approach if you want to account for chemically recycled plastic in your Plastic Packaging Tax return.
You can use a mass balance approach in your Plastic Packaging Tax return when you:
- manufacture packaging components in the UK using chemically recycled plastic
- import finished packaging components into the UK that were manufactured using chemically recycled plastic
Using a mass balance approach is optional, but if you do not use it all your chemically recycled plastic will be treated as non-recycled (virgin) plastic for the purposes of Plastic Packaging Tax.
We will publish more detailed guidance in early 2027.
Who should read this guidance
This guidance is for businesses that want to account for chemically recycled plastic attributed using a mass balance approach for the purposes of Plastic Packaging Tax.
If you only need to account for mechanically recycled plastic in your Plastic Packaging Tax return, you cannot use a mass balance approach. You must use the other method to account for recycled plastic.
Read the minimum certification requirements for a mass balance approach for Plastic Packaging Tax if you are a:
- chemically recycling plastic certification scheme operator
- chemically recycling plastic certification body
- business in the supply chain that needs to be certified
What a mass balance approach is
A mass balance approach allows the proportion of chemically recycled plastic in a mixture of recycled and virgin plastic to be attributed to the plastic components of your packaging (output).
Without a mass balance approach, it is impossible to tell the difference between virgin plastic and chemically recycled sources in the output.
When using a mass balance approach for Plastic Packaging Tax, any chemically recycled plastic attributed using a mass balance approach must be covered by a third-party certification scheme that meets the minimum requirements for Plastic Packaging Tax.
When to use a mass balance approach
You can only use a mass balance approach in Plastic Packaging Tax to account for the amount of chemically recycled plastic attributed where:
- the recycling process changes the chemical structure of plastic waste
- all the businesses involved in the recycled material supply chain are certified by a chemical recycling certification scheme that meets the Plastic Packaging Tax minimum requirements — read the section ‘What businesses in your supply chain must do’
When you must be certified
You must be certified if you:
- manufacture plastic packaging using chemically recycled material
- import and manufacture plastic packaging using chemically recycled material
If you only import finished plastic packaging where a mass balance approach has been used, you do not need to be certified. However, you still need to make sure that your supply chain has been certified and hold evidence of this from your supplier.
How to use a mass balance approach in Plastic Packaging Tax
If you plan to use a mass balance approach for chemically recycled plastic to meet the 30% Plastic Packaging Tax exemption threshold, you must:
- keep valid certificates and attribution declarations
- keep any required site-specific mass balance records
- make sure your supplier is certified to the minimum requirements
- do due diligence checks to confirm that your supplier is correctly certified — read the section ‘What checks you must make’
- keep records for 6 years — read the section ‘What records you must keep’
If any business in your supply chain is not certified, you cannot account for the recycled content using a mass balance approach in your Plastic Packaging Tax return.
What businesses in your supply chain must do
All the businesses in your supply chain, from the chemical recycler to the plastic packaging convertor, must be certified to process, receive, supply or store material used to make chemically recycled plastic.
They must be certified from when the waste is recycled through to when the manufacturing of the plastic packaging component is complete.
A supply chain:
- begins when waste plastic enters the chemical recycling process
- ends when the final attribution declaration is given to the recipient of the plastic packaging component, who accounts for packaging on their return
Businesses in your supply chain must:
- ensure their supplier is certified
- keep valid certificates, attribution declarations and any required site-specific mass balance records
- operate a site-level mass balance system with a 3-month mass balance approach accounting period and no negative balance
- use fuel-excluded attribution where their process produces outputs that include fuel-use products
- calculate and applying site-specific conversion factors where they calculate attributed recycled plastic
- keep records for 6 years
While all the businesses in your supply chain must have a valid certificate, they do not all need to be registered under the same certification scheme.
Read more detailed guidance about the minimum certification requirements for a mass balance approach for Plastic Packaging Tax.
Sending chemically recycled plastic from one business to another
When chemically recycled plastic is passed from one business in the supply chain to another, the sending business must also give the receiving business:
- A copy of a valid certificate issued by an accredited certification body showing that a business meets the certification requirements for using a mass balance approach for Plastic Packaging Tax purposes.
- A completed attribution declaration — a document that comes with attributed chemically recycled material and contains all the information required to identify the material, who is involved in the transaction and the amount of attributed recycled material being transferred.
Businesses must pass a new attribution declaration along the supply chain for each batch of attributed recycled material.
Example
You are a UK importer of a finished plastic packaging component.
In your supply chain there are multiple different businesses, such as a:
- chemical recycler
- petrochemical cracker
- polymerisation plant
- plastic packaging manufacturer
Each business in your supply chain must be certified. When they send a batch of attributed recycled material to another business in the supply chain, they must send that business a new attribution declaration with it.
When you receive the manufactured plastic packaging, you must check your supplier’s certification and attribution declaration before you can use a mass balance approach to account for the chemically recycled plastic in your Plastic Packaging Tax return.
If your supplier does not produce a valid certificate or attribution declaration, you cannot use a mass balance approach in your return.
What checks you must make
You must make due-diligence checks if you receive plastic packaging components that have been attributed with chemically recycled material.
You must check that:
- your supplier is certified
- the attribution declarations you receive are complete and valid
If you do not do these checks, you may not be able to prove you’re receiving the right amount of attributed chemically recycled plastic.
How to verify that your supplier is certified
A certification scheme that meets the minimum requirements must have an electronic register that you can use to:
- confirm the details of your supplier’s certification
- find out their eligibility dates
How to check the attribution declarations you receive
Every time you receive a batch of material, the business supplying it must give you a completed attribution declaration. It is your responsibility to check that it is complete.
If you accept an incomplete attribution declaration, you will not be able to claim an exemption from the Plastic Packaging Tax on your return.
What records you must keep
You must keep:
- a valid certificate
- attribution declarations for each batch of material
You will need to keep evidence that chemically recycled material has been attributed to the plastic packaging components you have imported. You can do this by:
- getting a copy of your supplier’s certificate
- getting attribution declarations from your supplier
- doing due diligence checks
You and all the businesses in your supply chain must keep records in writing (including in electronic form) for 6 years.
What HMRC may ask to see
If HMRC carries out a compliance check on your business, we may ask to see:
- valid certificates
- attribution declarations
- supply chain evidence
If you cannot show HMRC this evidence, you may need to pay the Plastic Packaging Tax on any components you reported as exempt due to the use of attributed chemically recycled plastic.
You can read more about record keeping and compliance in minimum certification requirements for a mass balance approach for Plastic Packaging Tax.
Penalties
HMRC may charge you a penalty if you do not meet the minimum requirements to use a mass balance approach but account for chemically recycled plastic on your return.
We will publish more information on penalties in early 2027.
Read more about Plastic Packaging Tax penalties.