Plastic Packaging Tax vs EPR: Understanding the Two Schemes

If you manufacture, import, or sell packaged goods in the UK, there is a reasonable chance you are caught by two distinct regulatory schemes that both concern packaging but operate in fundamentally different ways. The Plastic Packaging Tax (PPT), administered by HMRC, has been in force since April 2022. The reformed Extended Producer Responsibility (EPR) for packaging, administered by DEFRA, launched in April 2025. Both affect packaging. Both carry financial obligations. But they target different things, are managed by different government departments, and require different data.

The overlap between these two schemes is a consistent source of confusion for compliance teams. Businesses frequently ask whether they are being taxed twice on the same packaging, whether meeting one obligation exempts them from the other, and how the data requirements interact. This article provides a comprehensive comparison of PPT and EPR, explains where they overlap, addresses the double-taxation concern, and offers practical guidance for managing compliance with both schemes simultaneously.

The Plastic Packaging Tax: An Overview

The Plastic Packaging Tax was introduced by HMRC as part of the UK government's Resources and Waste Strategy. It came into effect on 1 April 2022 and applies a flat-rate tax to plastic packaging that does not contain at least 30% recycled content by weight.

Who Is Liable?

PPT applies to businesses that manufacture or import plastic packaging components in quantities exceeding 10 tonnes per year. The key word here is "plastic." PPT does not apply to glass, aluminium, paper, cardboard, steel, wood, or any other non-plastic packaging material. It is exclusively a plastic packaging measure.

Liability falls on the entity that either:

• Manufactures plastic packaging components in the UK, or
• Imports plastic packaging components into the UK (whether filled or unfilled)

Note that this is distinct from EPR's definition of an obligated producer. Under PPT, liability is triggered by manufacturing or importing the packaging itself. Under EPR, obligation is triggered by placing packaged goods on the UK market. A retailer who sells private-label products is an obligated producer under EPR but is not the manufacturer or importer of the packaging under PPT (their contract packer or packaging supplier is).

The Tax Rate

The PPT rate is set at £217.85 per tonne of plastic packaging that fails to meet the 30% recycled content threshold. This rate is reviewed annually and has been adjusted from the original £200 per tonne rate at introduction. Packaging that contains 30% or more recycled plastic content by weight is exempt from the tax, though it must still be reported.

Reporting and Payment

PPT operates on a quarterly return basis, submitted through HMRC's online tax platform. Businesses must track the total weight of plastic packaging manufactured or imported, the proportion meeting the 30% recycled content threshold, and any applicable exemptions (such as packaging that is exported). Returns are due quarterly, and the tax is payable alongside the return.

Extended Producer Responsibility: An Overview

The reformed EPR for packaging is a fundamentally different kind of scheme. Where PPT is a tax designed to incentivise recycled content in plastic, EPR is a cost-recovery mechanism designed to make producers pay the full net cost of managing their packaging through the waste system.

Who Is Obligated?

EPR applies to any business that places packaged goods on the UK market and meets the threshold criteria. For large producers, this means a turnover exceeding £2 million and handling more than 50 tonnes of packaging per year. For small producers, the thresholds are £1 million turnover and 25 tonnes of packaging.

Critically, EPR covers all packaging materials, not just plastic. Your EPR obligation includes aluminium, glass, paper and card, plastic, steel, wood, fibre composites, and any other material used as packaging. If you place it on the UK market, you report it.

The Fee Structure

EPR fees are not a fixed tax rate. They are calculated based on the estimated cost of collecting, sorting, and recycling each type of packaging material, adjusted for the packaging's recyclability as determined by the Recyclability Assessment Methodology (RAM). Starting from the 2026-2027 compliance year, fees are modulated based on RAM ratings, meaning less recyclable packaging costs more.

The base fees vary by material type and are set annually by the scheme administrator. Unlike PPT, which is a per-tonne flat rate on plastic only, EPR fees reflect the actual waste management costs for each specific material and format combination.

Reporting and Payment

EPR reporting is submitted to the RPD (Register of Packaging Data) managed by the Environment Agency. Large producers report twice per year (April and October), while small producers report once per year. The data submission follows DEFRA's 15-column specification, which includes material type, weight, packaging class, household/non-household split, nation of sale, and RAM rating.

EPR fee invoices are issued separately from the data submission, calculated by the scheme administrator based on the reported data.

PPT vs EPR: A Side-by-Side Comparison

The following table summarises the key differences between the two schemes.

Where the Two Schemes Overlap

The overlap between PPT and EPR occurs specifically in the area of plastic packaging. If you are a business that both manufactures (or imports) plastic packaging and places packaged goods on the UK market, you may have obligations under both schemes for the same physical packaging.

Consider a UK food manufacturer that produces ready meals. They buy plastic trays from a UK packaging supplier, fill them in their factory, and sell the finished products to supermarkets. Under PPT, the packaging supplier who manufactured the plastic trays is liable for the tax (assuming the trays do not meet the 30% recycled content threshold). Under EPR, the food manufacturer is the obligated producer because they are the brand owner placing packaged goods on the market.

In this scenario, PPT and EPR fall on different entities in the supply chain. The packaging supplier pays PPT. The food manufacturer pays EPR fees. There is no double-taxation on a single business.

But the picture changes if the entities overlap. If the food manufacturer imports plastic trays directly from an overseas supplier, they become the PPT-liable party (as the importer) while also being the EPR-obligated producer. Now both obligations fall on the same business for the same packaging.

The Double-Taxation Question

This is the question that generates the most anxiety. If a business pays PPT on plastic packaging and also pays EPR fees on that same packaging, are they being taxed twice?

Technically, no. The government's position is that PPT and EPR address different objectives and different costs:

• PPT is a tax designed to create a price signal that incentivises the use of recycled plastic. It is a behavioural lever. If you use 30% recycled content, you pay nothing.
• EPR is a cost-recovery mechanism that funds the actual collection, sorting, and recycling of packaging waste. It is paying for a service, not a behavioural penalty.

In economic terms, they are distinct charges for distinct purposes. But in practical terms, the business writing both cheques may find the distinction academic. The combined cost burden on plastic packaging is real, and it is higher than for any other packaging material category. This is by design. Both schemes are intended to shift the economics of plastic packaging toward more sustainable choices.

"PPT asks: does your plastic contain recycled content? EPR asks: can your packaging be recycled? They are measuring different things, but the business paying both bills feels the cumulative weight regardless."

Which Businesses Are Caught by Both Schemes?

Several common business models result in dual obligations. Understanding whether your business falls into one of these categories is essential for planning your compliance workload and budget.

Vertically Integrated Manufacturers

Businesses that both manufacture their own plastic packaging (or packaging components) and sell finished packaged goods are caught by both PPT (as the manufacturer) and EPR (as the brand owner). This is common in the drinks industry, where bottlers may blow-mould their own PET bottles and then fill and distribute them.

Direct Importers

Any business that imports packaged goods where the packaging is plastic triggers PPT liability as the importer of the plastic packaging. They also trigger EPR liability as the entity placing the packaged goods on the UK market. This is extremely common in retail, where supermarkets and online retailers import private-label products in plastic packaging from overseas manufacturers.

Contract Packers Selling Own-Brand

A contract packer who manufactures plastic packaging and also sells some products under their own brand faces PPT liability on all the plastic packaging they manufacture and EPR liability on the proportion they sell under their own brand.

Businesses Below One Threshold but Above the Other

The thresholds differ. A business importing 15 tonnes of plastic packaging per year exceeds the PPT threshold (10 tonnes) but may not exceed the EPR threshold (25-50 tonnes across all materials) depending on their total packaging portfolio. Conversely, a business handling 100 tonnes of cardboard and 5 tonnes of plastic exceeds EPR thresholds but falls below PPT's 10-tonne plastic-specific threshold.

How Recycled Content and Recyclability Interact

One of the more nuanced aspects of managing both schemes is understanding how recycled content (the PPT metric) and recyclability (the EPR metric) relate to each other. They are not the same thing, and optimising for one does not automatically optimise for the other.

Recycled content refers to the proportion of the packaging material that comes from recycled sources. A PET bottle made from 50% recycled PET (rPET) has 50% recycled content. This is what PPT measures.

Recyclability refers to whether the packaging can be effectively collected, sorted, reprocessed, and sold as secondary material at the end of its life. This is what EPR's RAM rating measures.

A packaging component can have high recycled content but poor recyclability. For example, a multi-layer flexible pouch could theoretically be manufactured from recycled plastics, giving it 30%+ recycled content and PPT exemption. But that same pouch may receive a Red RAM rating because multi-layer flexibles cannot be effectively sorted and reprocessed in UK infrastructure, resulting in higher EPR fees.

Conversely, a clear virgin PET bottle has zero recycled content (failing the PPT threshold) but excellent recyclability (likely Green-rated under RAM), resulting in lower EPR fees but full PPT exposure.

Managing Dual Compliance: A Practical Framework

For businesses caught by both PPT and EPR, running the two compliance processes in parallel creates unnecessary duplication. Much of the underlying data is the same. Both schemes need to know what plastic packaging you handle, in what quantities, and what its material composition is. The difference lies in the additional data each scheme requires: recycled content percentage for PPT, recyclability classification for EPR.

Unify Your Packaging Data

Maintain a single master dataset for all packaging components that includes fields for both PPT and EPR reporting. At minimum, this should capture:

• Component description and identifier
• Material type (aligned to both HMRC and DEFRA categories)
• Weight per unit (grams)
• Annual volume and total tonnage
• Recycled content percentage (for PPT)
• RAM rating (for EPR)
• Packaging class (primary/secondary/tertiary, for EPR)
• Household/non-household classification (for EPR)
• Country of manufacture/import (for PPT export exemptions)

By maintaining a single source of truth, you avoid the situation where your PPT return says you handled 120 tonnes of plastic packaging but your EPR submission says 115 tonnes, triggering queries from both HMRC and the Environment Agency.

Align Your Reporting Calendar

PPT returns are quarterly (April, July, October, January). EPR data submissions for large producers are twice yearly (April and October). The April and October touchpoints overlap, which creates an opportunity to align your internal data collection cycles. If you are gathering packaging data for your April EPR submission, use the same exercise to prepare your Q1 PPT return.

Coordinate Material Change Decisions

When evaluating packaging material changes, assess the impact on both schemes simultaneously. A switch from virgin PET to 30% rPET achieves PPT exemption (saving £217.85 per tonne) while maintaining the same RAM rating (clear PET is Green-rated regardless of recycled content). That is a pure cost saving with no EPR downside.

But a switch from a mono-material film to a multi-layer barrier pouch with recycled content might achieve PPT exemption while worsening your RAM rating from Amber to Red. The PPT saving could be more than offset by the EPR fee increase, especially as modulation multipliers escalate through 2028-2029.

Upcoming Changes to Watch

Both schemes are evolving, and businesses managing dual compliance should monitor several developments.

PPT Rate Adjustments

The PPT rate is reviewed annually in the Budget. The rate has already increased from the original £200 per tonne to £217.85 per tonne. Industry observers expect continued upward adjustments, potentially tracking inflation or increasing faster if the government determines the tax is not sufficiently shifting behaviour toward recycled content adoption.

PPT Recycled Content Threshold

There has been ongoing discussion about whether the 30% recycled content threshold should be raised. Some industry groups have advocated for an increase to 40% or 50% by 2028. No formal announcement has been made, but businesses building long-term packaging strategies should consider whether their current recycled content levels provide adequate headroom if the threshold rises.

EPR Fee Modulation Escalation

As detailed in our EPR fee modulation guide, the modulation factor increases from 1.2x in 2026-2027 to 2.0x by 2028-2029. The financial penalty for poorly recyclable packaging will intensify each year, making the interaction between PPT and EPR fee optimisation increasingly consequential.

Chemical Recycling Recognition

The status of chemically recycled plastic under PPT is an area of active policy development. If packaging containing chemically recycled content is formally recognised as meeting the recycled content threshold, it could unlock PPT exemption for packaging formats (such as food-contact flexible films) where mechanical recycled content is currently not feasible. This would significantly change the economics for businesses with large flexible plastic packaging portfolios.

Digital Waste Tracking

DEFRA's Digital Waste Tracking programme will eventually create end-to-end digital records for waste movements. When fully implemented, this may provide more granular data on actual recycling outcomes, which could feed into both schemes. EPR fees might be adjusted based on actual recycling performance rather than theoretical recyclability, and PPT compliance could be verified through auditable digital trails.

The Bottom Line

PPT and EPR are not the same scheme, and they should not be managed as if they are. But they are also not entirely separate. For any business handling plastic packaging, the two schemes create a combined cost landscape where material choices have dual financial consequences.

The businesses that manage this most effectively are those that:

1. Maintain unified packaging data that serves both PPT and EPR reporting requirements
2. Evaluate material changes through a dual lens, assessing the impact on both recycled content (PPT) and recyclability (EPR) before committing to a packaging redesign
3. Build compliance processes that share infrastructure rather than running two parallel workstreams that duplicate effort
4. Monitor policy developments in both schemes, since changes to either can shift the cost calculus

The direction of travel is clear. Both schemes will become more demanding over time. PPT rates will likely rise. EPR fee modulation will intensify. The recycled content threshold may increase. The data requirements will expand. Businesses that invest in robust packaging data management now, covering both recycled content and recyclability, will be prepared for whatever the regulatory landscape delivers next.