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What is the ‘sugar tax’?

If you’ve noticed an increase in the price of your favourite fizzy pop recently, it’s most likely due to the government’s ‘Soft Drinks Industry Levy’ , or ‘Sugar Tax’ – as it has become known.

In April this year, it became law that manufacturers of high-sugar drinks have to pay extra tax on their products. The tax is being imposed on the producers of the drinks but they can choose to pass this on to you as consumer, to cover their costs. After paying income tax, car tax and every other kind of tax , an extra levy on a sugary treat perhaps feels rather unnecessary.

Which drinks are affected by this new tax?

It’s all down to how much sugar is in the drink. It is calculated on a g/100ml scale, so that it can be applied to any size can or bottle.

The highest rate of 24p per litre, is on drinks with over 8g per 100ml. Those with 5 – 8g per 100ml are taxed at 18p per litre.

This only applies to added sugar, so fruit juices are not included. Some milky drinks (like milkshakes) will also avoid the new tax because they contain a high amount of calcium – also needed for good health.

How are companies reacting to the new tax?

Some companies, like Fanta, are changing their drinks’ recipes in order to meet the g/100ml ratio. This has annoyed some people, like fans of Irn Bru, who don’t want the flavour of their favourite drink tampered with. Other companies, like Coca Cola, have chosen to keep their recipe the same and pay the extra tax.

Companies, like Tesco, have prepared for the new tax and already decreased the sugar content in their own brand drinks. So there won’t be much noticeable change to them, just the other branded drinks they sell.

Why have the government introduced this new tax?

Robert Jenrick MP, Exchequer Secretary to the Treasury, said: “The Soft Drinks Levy is one part of our plan to tackle childhood obesity. All revenues raised through the levy will directly fund new sports facilities in schools as well as healthy breakfast clubs, ensuring children lead healthier lives.”

Given that government figures show that over one third of children are classed as obese at the end of their primary school years, there is no argument that something must be done to tackle the problem. Public Health England also backed the plan with the statistic that every 10 minutes a child with preventable decay has a tooth removed. 

The charity Diabetes UK  firmly backs the new tax, saying in a statement; “Evidence shows that this levy has the potential to prevent obesity in up to 140,000 adults and children each year and, in turn, prevent nearly 19,000 cases of Type 2 diabetes. We’ve long supported this policy, and welcome it coming into force… there are clear health benefits to the whole population if we are all able to reduce the amount of free sugar in our diet. This policy will go some way to helping make this possible.”

Although they also raised an unexpected concern over those with diabetes who use sugary drinks to balance their hypos; “However, it is important to note that many people with Type 1 and Type 2 diabetes use high sugar products to treat hypos – reformulation and price increases will both have an impact on this. People with diabetes who use sugary drinks to treat hypos should be sure to read the labels to check the sugar content.”

Will the sugar tax really bring down obesity figures?

Only time will tell how effective this new tax will be on our current levels of obesity. Some people think that they will still be purchased, but just cost people more. Others think that this is a good step towards reducing ‘free’ sugar overall. There is some concern about the health effects of the artificial sweeteners that are replacing the missing sugar – again, we’ll need to wait for the answer to that long term question. What do you think?

For most people that have a can of fizzy pop as a treat, or as a mixer, the sugar tax is just making a small pleasure more expensive. But perhaps for those people who drink high-sugar drinks on a daily basis, the new tax will help them reconsider their choices and encourage them to opt for a healthier, now cheaper, beverage.

 

July 13th, 2018|tax|

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