HM Revenue and Customs (HMRC) has released updated figures projecting a decline in Plastic Packaging Tax (PPT) revenues for the 2025/26 financial year. This downward trend in tax receipts is attributed to a steady increase in the volume of plastic packaging manufactured in or imported into the UK that qualifies for tax exemption. Since the tax was introduced in April 2022, businesses have increasingly shifted towards packaging containing at least 30% recycled plastic to avoid the levy.
The primary objective of the PPT was to incentivise the use of recycled material over virgin polymers. The falling revenue figures suggest the policy is achieving its environmental goals. Rather than acting as a long-term revenue generator for the Treasury, the tax is successfully altering procurement behaviour. However, this shift places immense pressure on the supply chains of high-quality recycled polymers. As more packaging converters scramble to hit the 30% recycled threshold to avoid the tax—which has risen in line with inflation since its inception—the domestic UK supply of food-grade and high-quality recycled resins remains constrained.
For Turkish recyclers and UK packaging converters, this trend highlights a sustained, structural demand for imported recycled polymers. UK domestic recycling infrastructure alone cannot meet the surging demand for clean, consistent rPET, rHDPE, and rPP. Turkish processors, operating with advanced sorting and extrusion technologies, are ideally positioned to fill this supply gap. By exporting certified recycled resins that meet the UK's strict compliance standards, Turkish suppliers can help UK converters maintain their tax-exempt status. However, traders must ensure rigorous traceability and documentation to satisfy HMRC audits.
As a practical takeaway, UK converters and their importing partners should audit their supply chains immediately to ensure all recycled content claims are backed by robust, independent certification. As HMRC faces falling revenues, regulatory scrutiny and audits on tax-exempt claims are highly likely to intensify to prevent non-compliance.
