Plastic Packaging Tax, the Soft Drinks Industry Levy and digital waste tracking are often grouped together as environmental compliance. In Sage X3 they should not be treated as one requirement.
The first two create financial liabilities and quarterly returns. Waste tracking records physical movements and classifications, with different submission rules. The common thread is reliable product data: weight, material, sugar content, volume and movement history.
This guide describes a robust configuration pattern. Exact fields and menus vary by Sage X3 version, legislation and any existing customisation, so build and test it in a test folder before changing production.
Start with the rules Sage X3 must represent
Plastic Packaging Tax
From 1 April 2026, Plastic Packaging Tax is £228.82 per tonne of finished plastic packaging containing less than 30% recycled plastic. A business generally has to register when it manufactures or imports 10 tonnes or more in the next 30 days, or has reached that amount in the previous 12 months.
Returns are quarterly. Records must support the weight reported by product line, recycled content, exemptions, exports, conversions and credits, and must normally be retained for six years. Check the current Plastic Packaging Tax guidance on GOV.UK before changing a rate or rule.
Soft Drinks Industry Levy
The Soft Drinks Industry Levy — often called the Sugar Levy — is based on the volume and sugar content of liable drinks, not their sales value. From 1 April 2026 the rates are:
- £2.08 per 10 litres for drinks containing at least 5g but less than 8g of sugar per 100ml
- £2.78 per 10 litres for drinks containing at least 8g of sugar per 100ml
Returns are quarterly and must separate the levy bands and relevant categories of packaged or imported drinks. Dilutable products are reported using their ready-to-drink volume. Producers below one million litres over the relevant rolling period may qualify as small producers, but connected businesses and contract packing affect the calculation.
The government has announced further changes from January 2028, including a 4.5g threshold and changes for milk-based and milk-substitute drinks. That is a good reason to make bands and rates date-effective rather than embedding them in a report. See the current SDIL liability and rate guidance.
Digital waste tracking
Waste tracking is not a tax. The first mandatory phase requires permitted or licensed waste receiving sites in England and Wales to use the digital waste tracking service from 1 October 2026. Receipt data must generally be submitted within two working days.
Required data can include the waste movement, carrier and receiver, List of Waste or EWC code, recovery or disposal code, hazardous properties and persistent organic pollutant information. Rollout differs across the UK and by the role a business performs, so check the current digital waste tracking guidance for each site.
Build one controlled compliance data model
Do not begin with the tax code. Begin with the product and movement data needed to prove the calculation.
| Area | Product or transaction data to hold in Sage X3 |
|---|---|
| Plastic Packaging Tax | Packaging component or product line, plastic weight per unit, recycled percentage, manufactured or imported status, exemption or exclusion reason, export intention and evidence status |
| Soft Drinks Industry Levy | Sugar grams per 100ml, ready-to-drink litres per stock or sales unit, levy band, producer or importer status, small-producer registration number where relevant, export or destruction status |
| Waste tracking | List of Waste/EWC code, description, weight and unit, hazardous and POP details, recovery or disposal code, origin, carrier, receiver, permit or licence and movement dates |
Use standard product fields and units where they fit. Sage X3 supports product statistical groups across products and transaction lines, which makes them useful for high-level classification. Use controlled miscellaneous tables for values such as levy bands, exemption reasons and waste codes.
Where the standard product record does not hold the evidence you need, add protected specific fields under the Sage X3 naming conventions, rather than repurposing an unrelated field. Make the key fields mandatory for the relevant product categories and restrict who can change them.
For manufactured products, calculate packaging and liquid quantities from the bill of materials or packaging specification wherever possible. A manually maintained total on the finished product will drift as recipes and pack sizes change.
Configure date-effective calculation rules
Sage X3 tax determination crosses the business partner tax rule with the product tax level to select a tax code. Tax rates can be date-effective and company-specific. That framework is useful, but neither levy should be disguised as VAT.
Create separate additional or special-tax logic and dedicated accounting codes for:
- Plastic Packaging Tax due
- the lower SDIL band
- the higher SDIL band
- exempt or out-of-scope movements
- exports, conversions, losses and credits
Both liabilities are quantity-based, so the calculation needs a weight or ready-to-drink volume basis. Depending on the Sage X3 version and existing design, that may use a special tax, an invoicing element, a movement-based calculation, or a small protected customisation. Do not apply a percentage to the selling price simply because the VAT engine is already available.
Store rates in a date-effective table. The calculation should select the rate from the tax point or movement date and retain the rate used on the transaction. That makes a return reproducible after the government changes a rate.
Trigger liability from the right movement
A correct rate applied at the wrong event is still wrong.
For Plastic Packaging Tax, capture manufacture completion, import receipt, direct export, subsequent export or conversion, and any reversal. For SDIL, distinguish production, registered-warehouse movements, release from the packaging site, imports and drinks made available for sale.
Use Sage X3 stock movement references and lot traceability to link the return figure back to the source receipt, work order, delivery, export or credit. Returns and cancellations must reverse both the quantity and the associated liability in the correct reporting period.
For waste, create a controlled receipt record or integration that captures the regulatory fields before the movement is closed. Record the digital waste tracking reference returned by the service and flag submissions that have not succeeded within the deadline. Waste data should not be posted as a tax transaction merely to get it into a report.
Keep finance, returns and evidence connected
Create dedicated liability and expense or stock accounts for each levy, with the final accounting treatment agreed by the finance team and its advisers. Use analytical dimensions to separate site, product family and compliance stream without multiplying general-ledger accounts unnecessarily.
The quarterly control report should reconcile:
- source stock and production movements
- calculated taxable weight or liable litres
- exemptions, exports, conversions, losses and credits
- the liability posted to the general ledger
- the figures to be entered on the government return
Keep the evidence alongside the transaction or in a document store linked by a stable reference. A total without the specification, supplier declaration, export evidence or waste classification behind it is difficult to defend.
Test the exceptions before going live
Build a test pack covering taxable, exempt and borderline products; a rate change; an import; an export; a credit; an unfulfilled export intention; a recipe or pack-size change; and a waste receipt with hazardous or POP data.
Then ask someone who did not configure the system to reproduce the return from the audit trail. If they cannot get from the return total back to individual movements and evidence, the setup is not finished.
The outcome to aim for
The goal is not another spreadsheet prepared at quarter end. It is a Sage X3 process in which operational transactions create the compliance data automatically, exceptions are visible early, and the return becomes a controlled summary of records the business already trusts.