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Plastic Packaging Tax: Product approach for Sage X3

This is a new tax that will apply from the 01 April 2022 to businesses that use plastic packaging manufactured in, or imported into the UK, that does not contain at least 30% recycled plastic. Plastic packaging is packaging that is predominantly plastic by weight.

This article explains our current product approach to Plastic Packaging Tax (PPT) for Sage X3.

PPT is more than just potential information held or transactions processed within your Sage solution, it requires an assessment in terms of how it applies to your organization, your supply chain, processes, the information being captured, record keeping in regards to stock and much more.

As the story of PPT is still being written, no changes will be made to Sage X3 at this time, this is something we will continue to review and we have a survey available to understand your views.

Sage X3 is a powerful ERP system and is rich in functionality to enable customers to manage supply chains, track and trace, and report on materials and items used in manufacturing and distribution environments.  As such it is possible to configure your Sage X3 to capture and report data for a PPT submission once HMRC has finalised the requirements. As such we may be able to configure your system to capture and report on the necessary data.

Alternatively you may choose to keep detailed records outside of Sage X3 and this should include doing a review of tax treatment to apply to products you are importing or manufacturing within the UK to understand if they are applicable to PPT.

You may wish to consider using analysis or statistic codes to flag which of your product records are subject to PPT. Note that eco-taxes or packaging taxes are very common across legislations. Although such regulations usually collect the tax in the Sales processes so that they are not directly applicable to the PPT, they provide very good examples how to set-up product records, how to organize the processes and how to leverage the standard tools report the taxes.

Due to the nature of the tax, the complexities involved it’s important that you seek specialist guidance.

As guidance evolves including information on the return, and information to be recorded on invoices we’ll update this article.

Further information about PPT has been published on the Legislation hub
For general information about keeping records and submitting returns for the new tax, take a look at the following article
You can find out more about the Plastic Packaging Tax in our Sage Advice blog