Soft Drinks Industry Levy

You may be wondering what the Soft Drink Industry Levy (SDIL) is and what is the need for it. The soft drink industry levy is expected to have a positive impact on the health of the Individuals in the United Kingdom. From the 6th April 2018 you may need to register for SDIL if you are a producer, importer or a packager of soft drinks.

Soft drinks liable for the levy will need to be reported to HMRC on a quarterly return which will be fixed quarterly returns ending June, September, December and March.

You may be prosecuted or charged penalties if they do not register and pay any levies due at the right time.

What’s the Scale of the problem?

The UK currently has the highest obesity rates amongst other developed countries and a third of children are obese or overweight when leaving primary school. This is due to excess sugar consumption. Children in the UK are consuming too much sugar. On average, they consume three times the recommended level.  Public health experts have identified sugar-sweetened beverages as a major factor in the over-consumption of sugar, and a cause of childhood obesity. The Chief Medical Officer has said that reducing sugar content and portion sizes is a public health priority. Over 60 public health organisations have called for a tax on sugary drinks

Sugar consumption can be associated with serious health problems, such as type 2 diabetes, heart disease and several cancers. These health conditions can have major costs for individuals and families and can reduce individuals’ quality of life and ability to work.

The financial impact of the levy on individuals and households will depend on how many producers and importers are able to reformulate and avoid the charge and whether those who are unable to do so pass on the charge to the consumer.

What is the aim of the levy?

The aim of the new levy is to drive producer’s behaviour change. Producers have till April 2018 to reformulate their product mix and reduce sugar in their drinks. Producers will pay less if they:

  1. Reduce amount of added sugar in soft drinks
  2. Reduce portion size of sugary drinks
  3. Move consumers towards healthier choices.

They do not have to pass charge onto their consumers.

How will it work?

The levy will apply to the producers and importers of soft drinks containing sugar

Companies will pay a charge based on volumes of pre-packaged drinks with added sugar and total sugar content of 5 grams or more per 100 millilitres. The levy charge is 18 pence per litre for drinks in the main band, with a higher charge of 24 pence per litre for drinks that contain 8 grams of sugar or more per 100 millilitres. It will not apply to any drink where no sugar is added.

Alcoholic drinks with an Alcohol by volume of up to 1.2% are included in the levy. The government will make provision to exempt certain drinks that fall within this category from the levy.

Impact on business including civil society organisation

This measure is expected to have an impact on businesses. UK producers and importers of soft drinks within the scope of the levy will incur one-off costs with the new rules and training for staff, registration with HMRC, and developing the required reporting framework to complete tax returns. There will also be on-going costs including completing, filing and paying quarterly returns, keeping appropriate records and amending returns. There will also be new registrations and de-registrations each Small business with low volumes of productions or importing from the smallest producers will be exempt from the levy.


If you have further questions do not hesitate to contact Sterling Finance on 0161 339 4989 or email info

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