The Government Welcomes in the Sugar Tax

Sugar Tax

The UK government will be moving forward with a two-band levy on sugary drinks, as a means to tackle childhood obesity.

In December 2016, the Treasury released a draft publication on the proposed Soft Drinks Industry Levy, more commonly known as the ‘Sugar Tax’. The measure aims to combat childhood obesity and promote health by adding a charge to the production and importation of soft drinks with added sugar. This charge will be determined by the following bands:

  • 18p per litre on soft drinks with 5 grams of sugar or more per 100ml


  • 24p per litre on soft drinks with 8 grams or more per 100ml

As a result all producers, importers, retailers and consumers of such drinks will be affected by the change. The government hopes that this will:

  • Reduce the content of sugar as manufacturers begin to reformulate their products
  • Promote healthier choices for the consumer

With the levy set to come into effect from April 2018, the Finance Bill 2017 will outline and verify:

  • What drinks are not subject to the levy
  • The scope of the levy including the product type and sugar thresholds
  • Those who benefit from the exemptions
  • Those liable to register and pay towards the levy
  • Provisions for an export credit scheme
  • How payments towards the levy are to be made

Small and micro businesses should be aware that if they produce or import a small quantity of sugary drinks, which meet the quota, they will not be subject to the terms of the levy. However, alcoholic drinks with a volume up of 1.2% are subject to the charge.

The government expects that the levy will impact over 300 UK producers with thousands of businesses in the hospitality and food services affected. It is expected that the levy will raise £520million in the first year of being introduced. This should drop each year as producers start to formulate products differently. As a result, the government expects £455million to be raised in the tax year 2020/2021. Furthermore, research shows that the levy could potentially result in over 4,000 job losses and a reduction in GDP of £132million.

For further information or to discuss how the ‘sugar tax’ may impact your business, please contact our hospitality specialist Adam Moody at