The UK’s new packaging EPR rules (often called the “packaging tax”) took effect on 1 January 2025. Any company with turnover over £1 million and supplying more than 25 tonnes of packaging per year must register, report and pay disposal fees. The fees fund local recycling: PackUK, the government-appointed scheme administrator, collects payments from producers and pays local councils to process packaging waste.
Large UK firms may face bills in the millions – for example, Vinarchy UK (a leading wine distributor) reported multi‑million‑pound EPR costs for 2025. Companies must meet quarterly reporting deadlines or face penalties. This article explains the rules, key dates, fee calculations and penalties under the UK Packaging EPR scheme and how businesses can comply.
Businesses must comply if in the previous year they had UK turnover >£1 million and placed more than 25 tonnes of packaging on the UK market. (A “producer” is any company that manufactures, imports or packs goods under its own brand, places goods in packaging, or supplies packaging to another company.)
From 2025, those with a turnover of £1–2m and 25–50t of packaging are classed as small producers, while those with a turnover of ≥£2m and >50t of packaging are large producers. Both categories must report data; large producers pay higher fees.
Charities are exempt from EPR fees. Some packaging may also be excluded (e.g., fully reusable packaging or packaging exported from the UK).
Affected businesses had to register via the government portal (RPD service)—large organisations in July 2023 and small ones in January 2024—and submit biannual packaging data.
Each spring, after data is submitted, PackUK issues a Notice of Liability stating how much must be paid. This “bill” is based on the annual weight of each category of “household” packaging reported for the previous year. (For 2025 fees, packaging data from calendar year 2024 is used.)
Fees are set per material (e.g., plastic, glass, cardboard). For example, roughly speaking, Year 1 rates were on the order of £200–£485 per tonne depending on material type (PackUK publishes detailed rates).
The total liability = (tonnes of each material) × (fee per tonne). This covers the full costs of collection and recycling.
PackUK usually allows payment by direct debit over up to four quarterly instalments. Producers receive the NoL (usually October each year) and then pay quarterly amounts. Final payment is due within ~50 days of the notice (and 50 days after each subsequent invoice).
In Feb 2026 the government confirmed no change to Year 1 fees despite data resubmissions – the Treasury covered a funding shortfall so local authorities received the full promised funding. In effect, producers’ Year 1 rates stayed as originally issued.
UK EPR fees can run to many millions for large companies. In fact, Vinarchy UK – the merged Accolade/Pernod Ricard wine business – disclosed an ~£8 million EPR charge for its 2025 financial year (30 June 2025) when accounting for packaging waste. This one-off cost turned what would have been a profit into a loss.
To put the proposal in context, the scheme is expected to raise about £1.4 billion in 2025/26 for councils. Vinarchy’s £8m is just a fraction of that national total, reflecting its share of the UK packaging market. Smaller firms will pay proportionally less.
Companies should plan for these costs. EPR fees are essentially a waste-disposal liability, so budgeting for extra several-percent costs on packaging-heavy products is prudent.
If a producer fails to pay its disposal fees on time, PackUK can impose a variable monetary penalty (VMP). For an individual company, the fine is greater than 20% of unpaid fees, or 5% of UK turnover (for a single company). For a group registration, it can be 20% of fees or 2% of group turnover.
PackUK first sends a “notice of intent” with the penalty grounds, allowing 28 days to respond. After considering representations, a final notice of penalty is issued, to be paid within 28 days. Penalties are suspended during any appeal.
The Environment Agency (EA) enforces the underlying obligations—registering and reporting packaging data—but does not enforce the fee itself. In other words, PackUK handles non-payment, while the EA can intervene if a business refuses to register or report data. The EA can impose its own civil sanctions (fixed or variable fines) under the Environment Act 2021 for breaches like missing the registration deadline or filing incorrect data.
If a business misses the initial reporting deadlines, it may owe interest on late fees or face fines by the EA. Timely compliance is essential.
It’s the UK packaging EPR scheme: producers must fund recycling of packaging waste. Effective Jan 2025, it shifts costs onto companies (the “polluter pays” principle).
Any UK business with a turnover exceeding £1 million and supplying more than 25 tonnes of packaging in the prior year must register, report data, and pay fees. Small organisations (e.g., £1–2m turnover) still report if packaging > 25T.
After you report last year’s packaging volumes, PackUK issues a bill. Fees equal the weight (in tonnes) of each type of packaging you supplied multiplied by set per‑tonne rates. The Notice of Liability (issued in October for Year 1) is payable by direct debit in instalments, typically due within ~50 days of issue.
Non-compliance can be costly. PackUK can fine up to 20% of the unpaid fees (or 5% of your turnover). The Environment Agency can also sanction failures to register or submit data. It’s important to register on time, report accurately, and meet payment deadlines.
Yes. Charities are exempt from both the obligations and fees. Packaging that is reused (and meets certain conditions) or exported may not count toward your total. Full details are in gov.uk guidance, but in practice most commercial producers (especially large ones) will be liable.
At Apex Accountants, we help businesses navigate these new obligations. Our services include:
Our specialist tax and compliance team stays on top of DEFRA guidance and Environment Agency updates. We ensure you’re fully prepared to meet packaging EPR deadlines and help minimise costs and risks.
The new UK rules on packaging EPR represent a major shift for businesses that handle packaging. Companies like Vinarchy UK have already felt the impact of multi-million-pound fee liabilities. It’s vital to understand who is liable, how fees are calculated, and to meet all reporting/payment deadlines. By following the official guidance and seeking expert help, UK businesses can comply with confidence and avoid penalties under the EPR scheme.
Choosing between Xero and QuickBooks can affect how efficiently your business manages invoices, reconciles bank transactions, processes payroll and prepares...
If you owe HMRC money and you have been ignoring the letters, the rules around what can happen next are...
A construction subcontractor may complete a job worth thousands of pounds, only to find that the contractor has deducted 30%...
The property income tax rates April 2027 will increase the tax paid by individuals receiving rental income directly. From 6...
Business Asset Disposal Relief used to be known as Entrepreneurs’ Relief before 6 April 2020. The relief was renamed in...
Electric vehicles (EVs) can offer significant tax advantages for UK limited companies, particularly those purchasing company cars or providing electric...
A small business spends £2,000 on Google Ads, social media campaigns and printed promotional materials. When preparing its tax return,...
The VAT threshold for UK businesses in 2026/27 is £90,000 in taxable turnover over a rolling 12-month period. Businesses must...
The benefits of a tax advisor include legitimate tax savings, improved cash flow, reduced compliance risks and better financial decisions....
Founders’ Relief is a proposed new capital gains tax relief for founders and significant early investors in high-growth UK companies....
