Is The New UK Plastic Packaging Tax Localisation Built Directly Into Business Central?

At a Glance

Dynamics 365 Business Central does not include a dedicated UK Plastic Packaging Tax localisation, but it can support compliance through its existing data management, reporting and traceability capabilities. With the right configuration or specialist extensions, businesses can capture packaging data, automate reporting processes and meet HMRC Plastic Packaging Tax requirements more efficiently. 

What Is the UK Plastic Packaging Tax?

The UK Plastic Packaging Tax came into force in April 2022, adding another layer of compliance for manufacturers, distributors and importers. Soon, many organisations realised that handling packaging information, supplier declarations, recycled content and HMRC reporting can be time-consuming and error-prone.

Alongside UK environmental regulations such as Extended Producer Responsibility (EPR), businesses need reliable systems to collect, manage and report packaging data. If your organisation is already using Dynamics 365 Business Central, it’s an opportunity to simplify the entire process.

Many organisations ask us, “Does Business Central include built-in UK Plastic Packaging Tax functionality?”

Not as a dedicated UK localisation. But it provides many of the tools you need to collect and manage packaging data and automate reporting. In short, Business Central can support plastic tax compliance when configured correctly.

This guide explains where BC’s native functionality helps and where you may need additional support through configurations or extensions.

What Are the UK Plastic Packaging Tax Requirements?

The UK Plastic Packaging Tax (PPT) is an environmental tax introduced by HMRC to encourage the use of recycled plastic in packaging. HMRC updates the tax rate periodically.

Unless there’s an exemption, the tax applies to plastic packaging components manufactured in or imported into the UK that contain less than 30% recycled plastic. Businesses must register if they manufacture or import 10 or more tonnes of finished plastic packaging components over a rolling 12-month period or expect to exceed that threshold within the next 30 days.

To comply with this UK plastic packaging tax legislation, many organisations must collect detailed packaging information that may not be recorded in their ERP.

Which Businesses Must Comply With the Plastic Packaging Tax?

The UK Plastic Packaging Tax regulation affects a wide range of businesses, not only packaging manufacturers.

You may need to meet UK Plastic Packaging Tax requirements if:

  • You manufacture plastic packaging in the UK
  • Import finished plastic packaging
  • Import products with plastic packaging
  • Supply products using taxable plastic packaging
  • You contract with others to manufacture plastic packaging on their behalf

Whether PPT is payable depends on the recycled plastic content of the finished component and whether an exemption, exclusion or relief applies. It’s important that you understand your specific UK Plastic Packaging Tax requirements before deciding how Business Central ERP should support compliance.

Is Plastic Packaging Tax Functionality Built Into Business Central?

At present, Microsoft does not provide a dedicated plastic packaging tax functionality in standard UK Dynamics 365 Business Central. Microsoft’s current UK localisation includes features such as Making Tax Digital (MTD) for VAT, VAT reporting and UK-specific accounting requirements.

But that doesn’t mean Business Central can’t support compliance with plastic packaging tax requirements.

Moving away from disconnected spreadsheets and manual calculations, Business Central can provide a central platform for capturing relevant and operational data and generating reports, while PPT-specific data capture and calculations may require configuration and extensions.

It has strong capabilities for managing plastic packaging information, including manufacturing records, lot and batch traceability, purchasing history, reporting and analysis and more.

Once the capabilities are in place, you need the right Microsoft partner to help configure systems and processes to support your organisation’s compliance with PPT regulations and reporting.

Data You Need to Record for Plastic Packaging Tax

To use Business Central to support plastic packaging tax compliance, consider how packaging data will be captured and maintained within the ERP.

Depending on your circumstances, you may need to record:

  • Packaging component descriptions
  • Packaging weight
  • Plastic weight
  • Recycled plastic percentage and supporting evidence
  • Packaging type
  • Supplier details
  • Country of manufacture
  • Product identifiers
  • Batch or lot information, where appropriate
  • Import or manufacturing dates
  • Supporting documentation

It becomes easier to produce more reliable reports and respond to HMRC queries if this information is consistent.

When Additional Configuration or Extensions May Be Required

Your business may need additional configuration or extensions if your reporting requirements are more complex.

  • Automated PPT calculations
  • Packaging weight calculations across multiple components
  • Supplier declaration management
  • Compliance dashboards
  • HMRC reporting support
  • Packaging data validation
  • Integration with external compliance software

Requirements that extend beyond standard Business Central functionality may require additional configuration or specialist extensions. This is where a Business Central specialist partner like Brookland Solutions can help.

How Brookland Solutions Helps You Stay Compliant With UK Legislation

Compliance doesn’t end with installing the right software. You need to manage your business data and design processes and systems that keep pace with changing legislation.

Brookland Solutions is a Microsoft partner specialising in Dynamics 365 Business Central. We can help your business assess how Business Central can support UK compliance with the Plastic Packaging Tax alongside other UK regulatory requirements.

Our Microsoft-certified consultants can help you:

  • Review your existing packaging data
  • Identify gaps in current processes
  • Configure Business Central to capture relevant information
  • Improve packaging master data
  • Design practical reporting processes
  • Automate compliance activities where appropriate
  • Recommend suitable extensions where needed
  • Integrate BC with reporting and analytics tools

Our aim is to help your business reduce admin effort while improving the quality and accuracy of regulatory reporting.

Talk to Brookland Solutions about using Business Central to support your UK Plastic Packaging Tax processes. Book a consultation today.