UK to start enforcing sugar tax in less than a week as Ireland defers

Soft drink companies in the UK have less than a week before a sugar tax comes into effect.

The 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.

South Africa began enforcing a sugar tax on 1 April, and others are expected to follow suit – including Thailand, which is slowly phasing in sugar legislation to allow manufacturers to adapt.

An almost identical tax to the UK’s levy was supposed to come into effect in Ireland on 6 April, too, but the country’s Department of Finance has since pushed the start date back to 1 May.

The UK 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.

There are a number of exceptions: 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.

Further, in the UK, any alcohol substitute like 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.

The UK tax equates to additional £0.18 per litre for drinks with 5g or more of sugar per 100ml, with a higher band for drinks with 8g or more of sugar.

The rates and exemptions of the Irish tax are very similar, including two taxable bands for drinks with 5g and 8g of sugar.