Chancellor Philip Hammond, in his spring Budget speech, announced the rates for the soft drinks industry levy, which is set to come into force from April 2018, setting them at 18p per litre for the main rate and 24p per litre for the higher rate
The soft drinks industry levy is estimated to raise £520m a year and is designed to reduce the UK’s sugar consumption by taxing fizzy drinks with high levels of sugar.
The levy will be charged to producers and importers of soft drinks and will apply to volumes of added sugar drinks with a total sugar content of five grams or more per millilitre with a higher rate threshold set at eight grams or more per millimetre.
Therefore drinks with a total sugar content of five grams or more per 100 millilitres will pay a levy of 18p per litre and those with eight grams or more per 100 millilitres will pay 24p per litre.
The threshold were deigned this way so that producers have the option to reduce the sugar content in their drinks to pay less tax or avoid the levy altogether.
Following consultation, the legislation has been revised to include a criminal offence for evasion of the levy and other amendments have been made to improve the clarity of the measure.
This measure was first announced by George Osborne in Budget 2016 and will be legislated in Finance Bill 2017.
The levy was given a two-year delay period to give producers time to reformulate their products and cut the sugar content.
Further information on the soft drinks industry levy is available here.
