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What does the “sugar tax” mean for you?

9th April 2018

The Soft Drinks Industry Levy is now force throughout the UK. Dubbed the “Sugar Tax”, the provisions introduced in the Finance Bill 2017 introduce a tax on soft drinks which contain certain levels of sugar. The move was intended to both reduce consumer consumption of unhealthy soft drinks and raise revenue which will be funnelled back into education and healthcare. Whether you are a manufacturer of a liable drink or a company involved in its packaging, it is important that you are aware of what the new Levy will mean for you and your business.

The Levy is progressive and applies to any drink (with an alcoholic content below 1.2%) falling within the legislative definition of “soft drink”. Any drink with a sugar content of between 5-8g/100ml will be charged at a rate of 18p/litre, while any drink with a sugar content of above 8g/100ml will be charged at 24p/litre. Pure fruit juices and drinks with a high milk content are exempt.

The rules on registration for the Levy differ depending on your role in the production of liable drinks and can be found on the Government’s website[1]. Failure to register at the appropriate time could result in a fine and possibly prosecution.

Producers of liable drinks will have to register for the Levy as long as they are not a “Small Producer”, that is, as long as they produce 1 million litres of liable drink.

Packagers of liable drinks for third parties will have to register regardless of the volume of drink which is packaged. The Levy will be charged on producers when liable drinks are shipped from their warehouse.

It is possible for Small Producers to voluntarily register for the Levy. They will be provided with a registration number which they can then pass to any company involved with packaging their goods. Any product that has been packaged for a small producer who has provided their registration code will not be subject to the Levy.

If you have any questions or concerns about how the Soft Drinks Industry Levy will affect your business, the Morisons Food and Drink team is available by phone on 0141 332 5666.


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Morisons Solicitors Lucy Gannon

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