More than five years after it was introduced to try to drive down the amount of single-use plastic, figures show the effectiveness of the government’s plastic packaging tax (PPT) is “stagnating”.
There are growing calls for ministers to step in after latest figures from HMRC show barely a third of packaging manufactured or imported into the UK in the last year hit the government threshold of containing at least 30% of recycled material.
With companies continuing to instead import vast amounts of cheap virgin plastic from abroad, critics have warned the tax is losing the war against plastic and said much more needed to be done to invest in recycling infrastructure in the UK.
Figures released yesterday by HMRC show plastic packaging tax revenue accrued by in the financial year 2025/26 totalled £250m, decreasing by 4% compared with 2024/25.
Of the total tonnage of plastic packaging manufactured in and imported into the UK, 37% was declared as taxable under PPT.
Of the remaining 63% of plastic packaging tonnage manufactured in and imported into the UK, 51% met the 30% or more recycled plastic threshold, 11% was either exported, intended for export or converted and less than 1% was exempt because it was used for the immediate packaging of human medicines.
The PPT was announced in the 2018 budget and introduced on 1 April 2022. It applies to manufacturers and importers of plastic packaging components that contain less than 30% recycled plastic.
Businesses that manufacture or import plastic packaging into the UK over 10 tonnes within a 12-month period must declare the amount of plastic packaging manufactured or imported to HMRC.
According to the government, the tax was introduced to provide a “clear economic incentive” to use recycled plastic in packaging and stimulate an uptake in recycling and collection of plastic waste.
Yet despite the latest figures showing that as of 13 August 2026 5,142 businesses in the UK were registered for PPT, David Gudgeon, head of external affairs at circular economy specialist Reconomy, said the tax had achieved neither of its main goals.
“The latest data shows that progress on increasing recycled content in plastic packaging appears to be stagnating, with more than a third of plastic packaging still failing to contain even 30% recycled plastic,” he said.
“With the proportion barely changing, from 38% to 37% year on year, there is clearly much further to go to reduce reliance on virgin material.
“With prices for virgin plastic remaining persistently low, these figures aren’t surprising as it is often far cheaper to use new material than recycled content.
“This dynamic should start shifting as a range of policy measures begin to drive increased demand for recycled material, particularly packaging extended producer responsibility (EPR), Simpler Recycling and the plastic packaging tax.
“More importantly though, UK recycling infrastructure is not currently equipped to cope with a significant increase in plastic packaging collected for recycling. The widely documented structural challenges facing the sector, including competition from cheaper virgin plastics and soaring labour and energy costs, have forced many recycling plants to shut. As a result, the UK remains heavily reliant on exporting plastic material, with the latest UK government data showing that only around half (51%) of plastic packaging is recycled in the UK.”
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