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The UK’s tax authority, HMRC, has issued guidance for packaging manufacturers and importers on how to use a mass balance approach (MBA) to account for chemically recycled plastic in their Plastic Packaging Tax (PPT) return.
The government announced in November last year that it would allow companies to use this approach from 1 April 2027 but gave no further details at the time.
Businesses currently pay £228.82/tonne on finished plastic packaging containing less than 30% recycled plastic, while packaging containing at least 30% recycled content is exempt.
According to the guidance, published on 28 August, using MBA is optional. However, those that do not use it will have their chemically recycled plastic treated as virgin plastic for PPT purposes and will not be able to count it towards the 30% recycled-content threshold.
The guidance outlines:
- what MBA is and when and how to use it;
- which companies require certification;
- supply chain obligations;
- required checks;
- record-keeping requirements; and
- penalties.
Companies that manufacture plastic packaging using chemically recycled material, as well as businesses that both import and manufacture such packaging, must obtain certification if they use MBA. Businesses only importing finished packaging where MBA has been used do not need certification themselves, but must ensure relevant businesses in their supply chain are certified and retain evidence of that certification.
HMRC also published separate guidance on 28 August covering minimum certification requirements. Companies must:
- operate a site-level mass balance system with a three-month MBA accounting period and no negative balance at any time;
- use fuel-excluded attribution where a process produces outputs that include fuel-use products;
- calculate and apply site-specific conversion factors when calculating attributed recycled plastic; and
- keep records for six years.
Separately, HMRC ran a consultation in May on the certification requirements for mechanically recycled content under the PPT.
This article is part of a new, weekly news service from the Chemical Watch News & Insight team covering packaging regulations around the world.