The Sugar Tax, also known as the British Soft Drinks Industry Levy, was announced in March 2016 and came into effect in April 2018. research has shown that the tax has led to a significant reduction in the amount of sugar in the British diet. The amount of sugar consumed by children and adults from soft drinks has fallen significantly, by around half for children and by a third for adults, after the sugar tax was announced.
Below you will find a Q&A about the key features of the legislation.
What is the sugar tax?
The soft drinks levy, also known as the ‘sugar tax’, is a levy charged on soft drinks produced in the United Kingdom or imported into the country.
It was introduced as part of the UK’s obesity policy and was one of the key policies of the 2016 Childhood Obesity Strategy.
The tax was targeted at beverage producers to encourage them to reduce the sugar content of their products.
Under the levy, soft drink manufacturers must pay the following:
When was it introduced?
It was first announced in then-chancellor George Osborne’s budget in March 2016, which was central to the budget at the time. Osborne said that money raised from the levy would be used to fund sport in primary schools across England.
Osborne said of the policy: “I am not prepared to look back on my time here in this Parliament, carrying out this job, and say to my children’s generation, ‘I’m sorry, we knew there was a problem with sugary drinks, we knew it caused disease, but we dodged the hard decisions and did nothing.'”
At the time, the Office for Budget Responsibility said the levy could result in a “quite substantial price increase”, such as 80% on a two-litre bottle of Coca-Cola.
The levy came into effect just over two years after it was first announced in the budget in April 2018.
What is not covered by the sugar tax and why?
The levy applies to drinks to which sugar has been added during production, drinks with at least 5 grams of sugar per 100 ml in ready-to-drink or diluted form and drinks with an alcohol percentage of 1.2% or less.
Excluded beverages include those containing at least 75% milk, milk alternatives such as almond milk, soy milk, non-alcoholic beer and wine, fruit or vegetable juices, liquid drink flavourings added to foods or drinks such as coffee or cocktails, baby food and powdered drinks.
Because the levy only applies to soft drinks, foods with a high sugar content, such as biscuits and pastries, are currently not subject to the levy.
Was it effective?
Even before the levy came into effect, more than half of manufacturers changed the composition of their drinks to avoid the levy.
Since its introduction in 2018, several studies have shown that it is effective in reducing sugar intake in adults and children in the UK.
In the first year since its introduction, Public Health England said that the total sugar content per 100 ml has fallen by 28.8% between 2015 and 2018 for the beverages to which the levy would apply.
Research last year found that since the levy was introduced, it has prevented more than 5,000 cases of obesity in girls in their final year of primary school each year. Another study found that since the levy was introduced, fewer children in England have had to have their rotten teeth pulled by the dentist.