Sarah Garry Nov 3, 2026
Packaging policy update: rising costs, new requirements and opportunities to influence change
Recent announcements have brought further changes to the packaging policy landscape, from a higher Plastic Packaging Tax rate to planned certification requirements and changes to Deposit Return Scheme VAT accounting.
For brands managing Packaging Extended Producer Responsibility (pEPR), Plastic Packaging Tax (PPT) and Packaging Waste Recycling Notes (PRNs), these developments reinforce the importance of considering the regimes together.
Plastic Packaging Tax will rise in April 2027
The Budget confirmed that the PPT rate will increase from £228.82 to £236.56 per tonne from 1 April 2027. This is an increase of £7.74 per taxable tonne, approximately 3.4%.
The tax applies to chargeable plastic packaging containing less than 30% recycled plastic.
HMRC evaluation finds progress, alongside costs passed through to customers
Published on 28 October, HMRC’s final evaluation of PPT concludes that the tax has had a moderately positive effect on business behaviour and environmental outcomes. It identifies increased use of packaging meeting the 30% recycled-content threshold, alongside some packaging redesign and reductions in plastic use.
However, the response has been uneven across businesses. Half of those surveyed reported passing some or all PPT costs through to customers. The evaluation also acknowledges difficulties in separating the tax’s effects from wider market conditions and other influences.
For BBG, these findings underline the need to assess environmental outcomes alongside the cumulative costs businesses and consumers face.
Further changes to recycled-content rules and certification
Members should also prepare for previously announced changes taking effect on 1 April 2027. These will allow a mass balance approach to account for chemically recycled plastic for PPT purposes, subject to the relevant requirements. At the same time, pre-consumer waste will cease to qualify as a source of recycled content for PPT. Businesses relying on this material should review their exposure with suppliers.
HMRC published draft chemical-recycling certification regulations on 6 October. The technical consultation covers attribution, certification, auditing and record keeping, with responses directed to teamindirecttaxdesign@hmrc.gov.uk.
Separately, the Budget confirmed plans for mandatory certification from 1 April 2030 for businesses claiming the 30% recycled-content exemption using mechanically recycled plastic. This creates a further requirement to consider when developing longer-term sourcing and evidence systems.
Deposit Return Scheme VAT accounting to be simplified
The Budget also confirmed the government’s intention to legislate for a simplification first announced in 2025. Responsibility for accounting for VAT on unreturned deposits will sit with the Deposit Management Organisation, removing the requirement from individual producers.
The change is intended to apply when the scheme launches in October 2027. This is a welcome simplification, although affected members will still need to prepare for their wider DRS responsibilities.
Temporary PRN relief covers plastic, steel and wood
October’s intervention in the PRN market applies to plastic, steel and wood, following shortages in recycling evidence. The four UK regulators issued statements setting out their enforcement approach for the 2026 compliance year.
In England, the Environment Agency’s RPS 383 provides that it will not normally take enforcement action where producers meet its conditions, including achieving at least:
83% of their statutory plastic recycling obligation;
92% of their statutory steel recycling obligation; and
90% of their statutory wood recycling obligation.
These are proportions of the existing obligations, not replacement recycling targets. The underlying legal requirements remain, and certificates will record statutory non-compliance where the full obligation is not met. Members should confirm the relevant arrangements with their compliance scheme or national regulator.
Help shape future packaging policy
Members have two opportunities to contribute practical evidence.
The Product and Packaging Producer Survey 2026, conducted by Ipsos for Defra and the devolved administrations, seeks evidence about compliance costs, reporting, packaging decisions and operational impacts. We encourage members to participate before the 4 December deadline and explain how the different requirements interact in practice. The BBG will also be responding on behalf of members.
PackUK and UK Packaging PRO have also introduced a structured process for proposing changes to the Recyclability Assessment Methodology (RAM). Evidence supporting changes for RAM 2028 should reach UK Packaging PRO by 31 December 2026. This offers members an opportunity to identify technical difficulties and propose workable improvements.
Supporting BBG’s work
Businesses need a coherent framework that supports environmental improvements while providing certainty over costs, compliance and investment.
Please share examples of duplicated administration, inconsistent requirements, sourcing constraints or costs affecting packaging investment with Sarah. Member evidence will help us demonstrate where practical changes could improve delivery for the environment, businesses and consumers.