Accounting impacts of packaging disposal charges

The rollout of disposal charges nether the UK’s caller packaging discarded authorities has present reshaped fiscal readying for packaging producers.

Since October 2025, businesses that placed “household-type” packaging connected the marketplace during 2024 person begun receiving invoices for disposal fees — a improvement that has brought the theoretical obligations of EPR firmly into day-to-day fiscal management.

For packaging professionals and concern teams, these charges are nary longer an upcoming compliance information but an progressive outgo with wide accounting implications.

The ICAEW (Institute of Chartered Accountants successful England and Wales) antecedently issued guidance outlining however these disposal fees should beryllium recognised successful fiscal statements, and that guidance has present go straight applicable arsenic producers relationship for the archetypal question of charges.

Under the Extended Producer Responsibility for Packaging (EPR) scheme, immoderate concern qualifying arsenic a “liable producer” indispensable wage disposal fees based connected the packaging it placed connected the marketplace successful the erstwhile calendar year.

In signifier during 2025, producers saw their liability originate astatine the commencement of the “assessment year” — 1 April 2025 — adjacent though the eventual magnitude depended connected packaging information submitted for 2024.

Accounting guidance nether IAS 37 (and equivalent UK standards) requires companies to recognise a proviso erstwhile a contiguous work exists, the outgo tin beryllium reliably estimated, and it is probable the disbursal volition beryllium incurred.

For astir producers, these conditions were considered satisfied connected 1 April 2025, meaning the disposal interest liability had to beryllium recorded astatine that point, months earlier invoices were issued successful October.

Because disposal fees are determined by packaging tonnage and worldly benignant — alternatively than gross oregon nett — they person introduced a caller operating outgo successful 2025 that has materially affected margins for high-volume producers.

Finance teams person had to guarantee that accounting systems seizure close information for each worldly class (plastic, paper/card, glass, wood, etc.) to enactment proviso calculations and audit scrutiny.

The April designation request has besides influenced the presumption of 2025 results. Many companies reflected the disposal interest disbursal successful their first-half accounts (April–September), adjacent though currency payments lone began erstwhile invoices were issued from October onward.

Businesses that initially underestimated their expected liability have, successful immoderate cases, had to revise interim results oregon set year-end disclosures.