Sugar Tax: UK government’s sugar tax comes into effect

The UK government has today introduced a sugar tax on soft drinks, meaning drink manufacturers will have to pay a levy for each high-sugar soft drink they sell in the country.

The tax will apply to any soft drink with an alcoholic content lower than 1.2% ABV that is ready-to-drink or ready-to-dilute, and that is packaged for sale.

In order to meet the taxable threshold, beverages will need to contain at least 5g of added sugars per 100ml of ready-to-drink or diluted product.

This equates to additional £0.18 per litre for drinks with 5g or more of sugar per 100ml, while drinks with more than 8g per 100ml will face a tax rate of £0.24 per litre.

However, the extra cost will only apply to drinks which are sold, meaning unsold product will not be taxed.

The UK government opted to introduce a tax on sugar-sweetened beverages in 2016 – but the two-year grace period means that the country will begin enforcing the policy on 6 April.

A number of drinks are exempt from the tax: dairy drinks with at least 75% milk are being protected for their nutritional value by both governments, and as the taxes only apply to added sugars, pure fruit juices will escape the legislation in both countries regardless of their natural sugar content.

Any alcohol substitute, such as de-alcoholised wine or beer, as well as any infant formula or baby food product, will also not be subject to the levy.

In a bid to protect small businesses, the British government has also granted a reprieve to soft drink producers selling less than 1 million litres of product a year.

But, if they grow so much that they exceed the 1 million litre threshold, they will have to register for the tax within 30 days of the month’s end.