HMRC gets sweet return in first six months of sugar tax

The latest statistics on turnover from the soft drinks industry levy (SDIL), commonly known as the sugar tax, show that it has been effective in reducing sugar in drinks and raising revenue following its introduction in April 2018

The tax, which is estimated to raise £240m for the full year, has so far raised £153.8m after coming into force. Companies are required to pay 24p per litre of drink if it contains 8 grams of sugar per 100 millilitres, or 18p per litre of drink if it contains between 5 - 8 grams of sugar per 100 millilitres. The legislation has, according to Public Health England (PHE), produced an 11% reduction in the sugar content of soft drinks by manufacturers as companies try to reduce the impact.

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). 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.

According to a PHE survey carried out by Ipsos Mori, around 90% of UK citizens support the government working with the food industry to reduce the amount of sugar available in everyday foods with the goal of reducing the risks of obesity and cancer. The tax is broadly popular, according to the poll, with those polled saying that they thought the greatest responsibility for preventing obesity lies with individuals and families (90%), the food industry (80%) and the government (72%).

Dr Alison Tedstone, chief nutritionist at PHE, said: 'Severe obesity in ten-to-eleven year-olds is at an all-time high. Plans to improve the nation’s diet are often described as ‘nanny state’ interference, but it is clear people want healthier food and they expect the industry to play their full part in this.'

Paul Haywood-Schiefer, tax manager at Blick Rothenberg, said 'There is a certain irony in this healthy increase for the Government on their tax on the deemed “unhealthy” soft drinks industry.'
 
'The first quarter’s figures were inline with their target to raise £240m for the year, but if the current trend continues, then by the end of the first year of this tax, I would expect the government to take a further £90-100m over this target.'
 

Report by James Bunney

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