Introduction

On 18 May 2026, His Majesty’s Revenue and Customs (HMRC) and His Majesty’s Treasury (HM Treasury) opened a 12-week consultation on possible mandatory third-party certification for mechanically recycled plastic used in packaging. The proposal matters because businesses currently rely on their own recycled-content evidence to keep packaging outside the UK Plastic Packaging Tax (PPT). If certification becomes compulsory, self-declared evidence may no longer be enough.

Breakdown

The Plastic Packaging Tax took effect on 1 April 2022 under Part 2 of the Finance Act 2021. It applies to any finished plastic packaging components manufactured in, or imported into, the United Kingdom. 

A business must register for the tax once it has manufactured or imported 10 tonnes or more of such components in the previous 12 months or expects to reach that threshold in the next 30 days, regardless of whether the packaging is ultimately taxable. Registered businesses generally submit tax returns quarterly.

A component containing at least 30% recycled plastic by weight is not chargeable to the tax. The rate for components below that threshold has risen each April since launch, from £200 per tonne in 2022 to £228.82 per tonne as of 1 April 2026.

HMRC states that the exemption is effective in one respect: its own data indicate that more than half of the packaging within the taxable scope placed on the UK market is now reported as exempt due to recycled content. However, it has become worried about the reliability of that evidence, pointing to untrustworthy self-declarations, inconsistent records from suppliers, and instances of fraudulent or mistaken claims. 

The consultation suggests making third-party certification mandatory for claims based on mechanically recycled plastic, matching a certification system HMRC has already confirmed for chemically recycled plastic accounted for under a mass balance method from April 2027. Within that system, HMRC does not directly oversee certification schemes or bodies, but any scheme used as evidence must satisfy minimum standards the department has established. 

Officials are asking, among other matters, how widespread fraud actually is, which businesses should be subject to a certification requirement, and how much preparation time the market would require. If implemented, businesses might not be able to use the 30% exemption without a valid certificate, even when the packaging genuinely meets the threshold. At present, no such requirement exists, and the consultation ended on 10 August 2026 without any modification yet being implemented.  

Impact on Law Firms

  • Tax Team: Will assess clients' registration position, current recycled-content evidence and exposure if that evidence would not meet a certification standard.
  • Commercial Team: Will create supplier terms that require verifiable recycled-content data, certification and audit access, with remedies if evidence later proves inaccurate.
  • Regulatory and Environmental Team: Will advise on how certification interacts with wider recycling standards and environmental marketing claims.
  • International Trade Team: Will support importers in determining whether overseas certification would satisfy UK evidential requirements.

Future Outlook

HMRC and HM Treasury are expected to publish a formal response in due course, though no date has been confirmed. Businesses should not assume existing supplier declarations will satisfy any future standard. Reviewing records, improving traceability and negotiating certification obligations now could reduce disruption if the proposal becomes law. The direction of travel, across both mechanical and chemical recycling, points toward independently verified evidence rather than self-reporting.