UK plastic packaging tax rises to £236.56 a tonne in 2027

By Marcus Bennett

The UK Plastic Packaging Tax (PPT) will rise from £228.82 to £236.56 per tonne on 1 April 2027, while recycled-content and mass-balance rules change on the same date.

The 2026 Budget produced a mixed industry response: selected manufacturers can gain electricity-cost relief and investment incentives, but packaging groups say taxes, producer responsibility and reporting duties continue to raise costs and complexity.

For packaging buyers and brand teams, the practical issue is not only headline relief. It is whether suppliers can document recycled content, absorb the higher tax and remain viable while several policy regimes converge.

What changes on 1 April 2027?

Pre-consumer waste will no longer count towards recycled content for PPT purposes, and mass balance accounting will begin on the same date. The change moves recycled-content qualification and evidence collection upstream. Packaging teams should expect closer scrutiny of material streams and supplier records rather than treating recycled content as a simple purchasing claim.

Mandatory certification for mechanically recycled plastic will follow in April 2030. That later date gives converters and brand owners time to align sourcing and verification, but it also establishes a fixed point beyond which mechanically recycled material will require certification. The takeaway is clear: recycled-content compliance now has a 2027 rule change and a 2030 certification deadline.

Eligible manufacturers can access electricity savings of up to 25% through the British Industrial Competitiveness Scheme from April 2027.

The main-rate first-year allowance for qualifying investment will increase from 40% to 50% in January 2027, while the writing-down allowance will fall from 14% to 12% in April. Faster capital recovery may support equipment purchases; the lower writing-down rate gives part of that benefit back over time.

The National Living Wage will also rise 3.9% to £13.21 an hour from April 2027. That adds to the cost base for labour-intensive packaging operations and narrows the margin available to pass increased material, energy and compliance costs through the supply chain.

The combined effect is selective support, not a general reduction in packaging costs.

Who gains support?

For some businesses, the investment measures offer opportunities, although their reach remains uncertain. Jo Stephenson, managing director of Think B2B Marketing, said: "The Budget offered selective cost relief," adding that eligibility would determine which parts of the packaging supply chain benefited from energy support.

Gillian Garside-Wright, director of consulting at Aura Global, argued that investment should extend beyond machinery to digital capability, automation, skills and the infrastructure required to make circularity commercially viable.

The Foodservice Packaging Association welcomed support for energy-intensive manufacturers and investment, but warned of growing costs and complexity from PPT, extended producer responsibility (EPR), packaging recovery notes and the forthcoming Deposit Return Scheme. It called for a coordinated review of packaging policy and said compliance costs fall disproportionately on responsible businesses.

The Food and Drink Federation took a harder line. Chief executive Karen Betts said: "The sector had not received the energy support available to other manufacturing industries," despite food and drink manufacturers paying energy costs at twice the European average. Her central criticism was that food and drink had been overlooked in the Budget.

The British Plastics Federation also questioned the limited support available to its members. Industrial and public affairs manager Mohamed Elkhalifa noted that plastics constitute the UK's third-largest manufacturing sector by employment, yet the sector has no dedicated support fund despite high energy costs. The omission matters for packaging converters facing energy-intensive processes and tax changes at the same time.

Can packaging policy work as one system?

The Packaging Federation was more positive. Chief executive Martin Kersh welcomed the government's commitment to reducing unnecessary regulation and improving industrial competitiveness, but called for the packaging sector to have a direct voice in the work of the new Better Regulation Executive. He also backed an urgent review of EPR.

That request carries weight because PPT, EPR, packaging recovery notes and the Deposit Return Scheme can create overlapping obligations for the same businesses. Poorly aligned timetables or definitions can turn policy support into duplicated compliance work.

The FPA's demand for clearer evidence from producers of improvements to recycling infrastructure points to the same issue: businesses need proof that the compliance burden is buying measurable system gains, not only new reporting requirements.

Three themes run through the responses. First, uncertainty remains over who benefits from government support. Second, investment must cover people and technology, not machinery alone. Third, packaging taxes and regulations must work together more effectively. The FDF, FPA, BPF and Packaging Federation may dispute the balance, but their positions all turn on implementation.

What should teams watch next?

Even if the Budget has been described as uneventful, its effect will depend on implementation and whether companies gain enough confidence to invest, innovate and remain competitive. Eligibility criteria for the energy scheme, operational detail for the PPT changes and the coordination of EPR and the forthcoming Deposit Return Scheme will determine the real cost.

For packaging professionals, the immediate work is to map exposure by supplier, material and operating site, then test whether electricity support and capital allowances offset the higher tax and compliance burden. The next decisive data point will be eligibility criteria and implementation detail for the April 2027 changes.