HMRC nets £154m in first six months of sugar tax

HMRC has released the latest statistics on turnover from the soft drinks industry levy (SDIL), commonly known as the sugar tax, introduced in April 2018 and intended to encourage manufacturers to reduce the sugar content in their drinks

For the year-to-date up to the end of October 2018, receipts from the sugar tax were £153.8m. The tax is set at two rates. The standard rate of 18p per litre is applied to drinks with a sugar content of between 5 grams and 8 grams per 100ml, while the higher rate of 24p per litre applies to drinks that exceed this quantity. Over 90% of net liabilities were declared at the higher rate in both quarters by 457 registered traders.

The value of the tax was broken into two periods: April-June 2018, and July-September 2018. The figures show marked differences between the two periods assessed, with net liabilities 51% higher in July-September (£61.4m) compared to April-June (£92.9m). Gross liabilities as imported and packages also showed this difference, with £71m in the first quarter and £105m in the second.

HMRC ascribes this difference to either seasonal shifts in consumption or trader behaviour ahead of the introduction of the levy. The total volume declared also shifted in line with seasonality, with July-September reporting a total of 448m litres compared to 307 in April-June, a 46% rise.

The levy, which applies to the packaging and importation of soft drinks containing added sugar, is intended to reduce the consumption of a food linked to obesity and long-term health complaints. According to Public Health England (PHE) statistics produced in May, the effect of the tax has been an 11% reduction by manufacturers of the sugar content found in soft drinks.

Revenue collected from the levy are to be used to fund physical education activities in primary schools, the Healthy Pupils Capital Fund, and provide a funding boost for breakfast clubs in more than 1,700 schools. The exchequer secretary to the Treasury, Robert Jenrick, said: ‘Today’s figures show the positive impact the soft drinks levy is having by raising millions of pounds for sports facilities and healthier eating in schools, as well as encouraging manufacturers to cut sugar in over half the drinks found in UK stores.

‘Helping our next generation to have a healthy and active childhood is a priority for us, and I’m pleased to see the industry is playing its part.’

HMRC’s soft drinks industry levy statistics are here

Accountancy Daily

How can we help you?

Brearley & Co Accountants are pleased to offer a free, no obligation, initial consultation with one of our experts who will be happy to discuss your business needs and how we can help you.

Are you a new business? Or an existing business interested in our services?