Most Plastic Packaging Tax budgets for next year will start with the rate. The rate matters, but it is not the biggest change coming. On 1 April 2027 the rules on what counts as recycled plastic change, and for some components that will decide whether they pay the tax at all.
This post covers what changes, which components it catches, and what to do with your packaging data before then. For the data PPT needs in general - component-level recycled content, evidence, and the difference between "not provided" and "confirmed zero" - see our earlier post on what your data needs to look like for HMRC.
Pre-consumer recycled plastic stops counting
PPT applies to plastic packaging components with less than 30% recycled plastic by weight. Until now, recycled plastic has included reprocessed pre-consumer waste: material that became waste during manufacturing, such as offcuts and rejects, and was reprocessed rather than simply fed back into the line. From 1 April 2027 it no longer counts.
HMRC's policy paper is direct about it. Businesses can keep using pre-consumer material, but it will no longer contribute to the 30% recycled content required for an exemption. The government's reasons are that it closes a loophole that undermined the purpose of the tax, removes the inconsistency in how businesses interpreted pre-consumer waste, and should push demand towards post-consumer recycling.
Until 31 March 2027, reprocessed pre-consumer plastic still counts. Scrap or regrind put straight back into the process after minimal reprocessing has never counted, because it was never waste.
Chemically recycled plastic can count, with a certified mass balance
The second change runs the other way. From 1 April 2027, businesses can use a mass balance approach to count chemically recycled plastic towards the 30% threshold. Chemical recycling breaks plastic waste down and mixes it with virgin feedstock, so the recycled share of a given component cannot be traced physically. Mass balance attributes it through certified accounting instead.
It is optional, but there is no other route: without it, chemically recycled plastic is treated as virgin plastic for PPT. Using it means every business from the chemical recycler to the packaging manufacturer holds a certificate from an accredited certification body, keeps a site-level mass balance with a three-month accounting period, and passes an attribution declaration on with each batch. Importers of finished packaging do not need certifying themselves, but must check and keep evidence that their supply chain is. Records are kept for six years. HMRC has said more detailed guidance will follow in early 2027.
Which components it catches
The pre-consumer change only affects components whose recycled content includes some pre-consumer material. It changes the answer for those whose post-consumer content on its own is below 30%. They fall into three groups:
- Exempt today, liable from April 2027. Recycled content of 30% or more in total, but less than 30% post-consumer - a tray with 20% post-consumer and 15% pre-consumer content, for example. These are the components to find first
- Exempt either way. 30% or more post-consumer content on its own. Pre-consumer content on top makes no difference
- Liable either way. Under 30% even with pre-consumer content included. Nothing changes, though a supplier offering pre-consumer content as a route to exemption no longer has one
The cost of moving from the first group to liable is simple to work out: the component's weight, times the units you manufacture or import in a year, times the rate. A 40g tray at 100,000 units a year is four tonnes of plastic. At the 2026/27 rate of £228.82 a tonne that is £915 a year, for one component line, before next year's increase.
What happens to the rate
The rate has gone up every April since the tax began: £200 a tonne in 2022, then £210.82, £217.85, £223.69 and £228.82 from 1 April 2026. Recent increases have been in line with the Office for Budget Responsibility's forecast of CPI inflation.
The 2027/28 rate has not been announced. Recent rates have been confirmed at the Autumn Budget, which this year is on 28 October. Until then, a budget should carry an assumption with the basis written down, such as this year's rate uplifted by forecast inflation, and be updated when the figure is published.
Getting the data ready
Most of the work is in the component data, and most of that comes from suppliers. Before April 2027:
- Hold post-consumer and pre-consumer recycled content as separate figures for every plastic component, not one combined percentage. A combined figure cannot tell you which group a component falls into
- Ask suppliers for the split, and for evidence that states it. A declaration that says "35% recycled content" without saying what kind will not support an exemption from April
- List the components that are exempt today only because of pre-consumer content, with their weights and annual volumes. That list is your exposure
- For each one, decide whether to raise the post-consumer content, move to chemically recycled feedstock under a certified mass balance, change the material or weight, or budget for the tax
- If you import finished packaging, ask now whether your suppliers intend to use mass balance, and which certification scheme they will be under
- Keep treating a component with no recycled content figure as liable. Without evidence of 30%, it is
How Merchant Packaging supports this
Merchant Packaging records post-consumer and pre-consumer recycled content as separate percentages on each component, with the source, certification and whether the figure has been verified, and links the supplier evidence behind them. The PPT exposure report and the compliance cost per component test the 30% exemption against post-consumer content alone - the basis that applies from 1 April 2027 - so the components that move from exempt to liable are already counted. Until then, that overstates the tax on a component that only qualifies through pre-consumer content, which is the cautious side to be on when setting next year's budget.
A component with no recycled content recorded is flagged rather than assumed exempt, and counted as liable in the compliance cost. The cost rolls up through the bill of materials to each SKU, alongside PRNs and the EPR disposal fee, and a what-if shows the effect of a change in recycled content, weight or material before anyone commits to it. Calculations currently use the 2026/27 rate of £228.82 a tonne.