- Plastic packaging tax (PPT) is not charged on components that contain at least 30% recycled plastic.
- HMRC published a consultation on whether a ‘mass balance approach’ should be allowed for calculating the amount of recycled plastic.
- A mass balance approach is a model that tracks materials through a complex value supply chain and enables recycled or sustainable inputs which are mixed with virgin material during the process to be allocated to particular outputs.
- Finance Act 2026 includes legislation to allow the use of a mass balance approach.
- HMRC have launched a consultation on a potential requirement for mandatory certification for mechanically recycled plastic to claim the PPT exemption.
- Timing: the government has confirmed that a mass balance approach will be allowed with effect from 1 April 2027.
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