The move is viewed as a health initiative, rather than a tax raising measure, and the compliance framework will reflect the current sugar tax regime for soft drinks under the soft drinks industry levy (SDIL).

Final plans will be confirmed by the Chancellor at the Budget in the autumn.

HMRC has confirmed to Business & Accountancy Daily that ‘the levy remains a tax only on pre-packaged drinks so doesn’t affect milkshakes and lattes prepared in high street coffee shops’.

This clarification will be a relief to the burgeoning number of high street coffee shops.