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Following a review of the Soft Drinks Industry Levy (SDIL), the Government is consulting on a number of changes, which would expand the scope of the SDIL.
Despite these changes, the SDIL will remain a tax on pre-packaged soft drinks with added sugar. This means that drinks made on-site in a hospitality business are not within scope of the SDIL.
The Government is proposing:
- To reduce the minimum sugar content at which the tax applies to qualifying drinks from 5g to 4g. The standard rate would apply from 4g to 7.9g total sugar per 100ml, as opposed to 5g to 7.9g total sugar per 100ml currently
- To remove the exemption for milk-based drinks whilst introducing a ‘lactose allowance’ to account for the natural sugars in the milk component of these drinks
- To remove the exemption for milk substitute drinks with ‘added sugars’ beyond those sugars derived from the principal ingredient, such as oats or rice.
- This will remain a tax on pre-packaged soft drinks with added sugar. This means that foods, alcoholic drinks, soft drinks with only natural sugars such as cows’ milk and pure fruit juice, will not be considered part of the proposals.
The consultation closes on 21 July, and please get in touch if you have any initial views.
UKHospitality CEO Kate Nicholls
Kate Nicholls, Chief Executive of UKHospitality, said: "Hospitality businesses continue to invest heavily in providing consumers with healthy options and a significant number of the drinks served in hospitality venues, including milkshakes and coffees, are served fresh on-site. These products are not affected by these proposals.
"However, increased costs in the wider food and drink supply chain could have knock-on cost implications for hospitality businesses buying affected pre-packed products, which is why we will be engaging with the Government consultation and stakeholders across the sector."
