Plastic Packaging Tax Exemption: Categories, Reliefs, and Records

The UK’s Plastic Packaging Tax exemptions fall into three groups: packaging made with at least 30% recycled plastic by weight, specific categories carved out by the Finance Act 2021 (medicinal immediate packaging, transport packaging on imports, aircraft/ship/rail stores, and items permanently set aside for non-packaging use), and packaging that is exported, which qualifies for either a deferral or a credit. Anything chargeable that falls outside these routes is taxed at £228.82 per metric tonne from 1 April 2026.¹

The 30% Recycled Content Exemption

This is the exemption that reaches the widest range of businesses, because it applies to any plastic packaging component regardless of what it holds or where it goes. If a finished component contains at least 30% recycled plastic by weight, no tax is owed on it.¹

The threshold applies to each individual component, not to your overall output. A business making ten different packaging products can owe tax on some and nothing on others, depending on the recycled content in each. And 30% is a cliff edge, not a sliding scale. Packaging at 29% recycled content is fully taxable; packaging at 30% owes nothing. Small changes in material sourcing can eliminate the tax on a product entirely.

You must be able to demonstrate the recycled content with evidence such as supplier certificates, chain-of-custody documentation, or mass balance calculations. One constraint to be aware of: recycled plastic is only permitted where other regulations allow it, so food-contact packaging and similar items may face safety rules that limit which recycled materials qualify.

Category Exemptions Under the Finance Act 2021

Four specific categories are exempt even when the recycled content is below 30%. Each targets packaging that either serves a specialised purpose or never enters the domestic waste stream.

Immediate Packaging for Medicinal Products

Plastic packaging produced or imported for use as the immediate packaging of a medicinal product is exempt. Immediate packaging is the container in direct contact with the medicine, such as a blister pack, bottle, or tube. The definition of “medicinal product” follows the Human Medicines Regulations 2012, so only products authorised under those regulations qualify.² Outer cartons and shipping boxes for medicines are not covered. The exemption stops at the layer touching the authorised product.

Transport Packaging on Imports

Transport and tertiary packaging used to deliver goods into the UK is exempt. This covers pallet wrap, shrink wrap, crates, and strapping whose sole purpose is securing goods during international transit.² The exemption applies only to packaging that accompanies goods into the country. Pallet wrap bought domestically and used to ship goods within the UK is not exempt on this basis.

Aircraft, Ship, and Rail Stores

Packaging that qualifies as “stores” under the Customs and Excise Management Act 1979 is exempt. In practice, this is plastic packaging for food, drink, and other consumables used on board international aircraft, ships, or rail journeys.² The packaging must be genuinely destined for onboard consumption or use during the journey. Packaging held on a vessel but intended for sale at a domestic port would not qualify.

Packaging Permanently Set Aside for Non-Packaging Use

Some plastic items are technically packaging components but are permanently designated for a different purpose before or as soon as they are produced or imported. Toolboxes, DVD cases, and similar items with a long-term functional use beyond containing a product fall into this category.² To claim the exemption, you must keep a record of the designation at the time of production or import.

Relief for Exported Packaging

Packaging that leaves the UK is not meant to bear a tax aimed at domestic waste. Two distinct relief routes exist, and the difference between them matters.

Deferring Tax on Intended Exports

If you intend to export packaging components within 12 months of manufacturing or importing them, you can defer the tax. The components still go on your return for the accounting period when they were produced or imported, but the tax due is subtracted from your bill before you submit. You need records showing the intent to export existed before or at the time of manufacture or import.³

The liability is cancelled once the components are actually exported and you hold records proving the export took place. If you change your mind, or if the export does not happen within 12 months, the components go back onto your next return as manufactured or imported packaging, and you pay tax at whatever rate applies at that point. If the rate has increased in the meantime, you pay the higher rate.

Claiming a Credit on Already-Taxed Exports

If you already paid the tax and the components are later exported by you or by another business, you can claim a credit on a subsequent return. Credits can only be claimed once you have evidence that the export happened, and the claim must be made within two years of the components being manufactured or imported.³ Credits are subtracted from your total Plastic Packaging Tax bill and appear in your account after you submit the return. The same credit mechanism applies when taxed components are converted into different chargeable packaging components.

Exemption Does Not Remove the Duty to Register

You must register for Plastic Packaging Tax if you have manufactured in the UK or imported into the UK 10 or more tonnes of finished plastic packaging components in the last 12 months, or you expect to reach that figure in the next 30 days.¹ Registration is triggered by weight, not by tax liability. Even if every one of your packaging components hits the 30% recycled content threshold and no tax is actually payable, you still need to register and file returns once you cross the 10-tonne line.

A packaging component counts as “plastic” if plastic is the heaviest single material by weight. A cardboard box with a plastic window falls in scope only if the plastic outweighs the other materials.⁴ Packaging that forms part of a finished product also counts toward the 10-tonne threshold. Groups of companies under common control can appoint a single UK-established representative member to register, submit returns, and pay on the group’s behalf, though each company in the group must individually meet the registration criteria.⁵

Records That Support Every Exemption Claim

Each exemption stands on the evidence behind it. HMRC requires accounts and records to be kept for at least six years from the end of the accounting period they relate to, and all weights must be recorded in tonnes, kilograms, and grams.⁶

For the recycled content exemption, supplier certificates, chain-of-custody documents, or mass balance calculations should be tied to each component. For medicinal packaging, keep copies of the marketing authorisations or licences from the relevant health regulator that link each plastic component to the approved medicinal product it holds. For transport packaging on imports, shipping manifests and transport logs should record the date of arrival, the type of packaging, and what happened to it after removal from the imported goods. For export deferrals, you need documentation showing the intent to export existed before manufacture or import, plus evidence of the actual export once it occurs.

Internal weight-tracking logs should separate plastic by type and exemption category, with the gross weight of the component and the legal basis for the exemption on each entry. Failing to keep required records can trigger a fixed £500 penalty, followed by a daily £40 penalty until you comply.⁷

1
GOV.UK. Plastic Packaging Tax: Steps to Take
2
UK Parliament. Finance Act 2021, Part 2 – Plastic Packaging Tax
3
GOV.UK. Get Tax Relief on Exported and Converted Components for Plastic Packaging Tax
4
GOV.UK. Introduction of Plastic Packaging Tax From April 2022
5
GOV.UK. Register a Group of Companies for Plastic Packaging Tax
6
GOV.UK. Records and Accounts You Must Keep for Plastic Packaging Tax
7
GOV.UK. Plastic Packaging Tax Penalties