Plans To Extend Sugar Tax To Milkshakes

The sweetener taxation applied to fizzy drinks is group to beryllium extended to milkshakes and different milk-based drinks nether caller authorities plans.

The authorities is consulting connected proposals to extremity nan exemption from nan taxation for dairy-based drinks, arsenic good arsenic non-dairy substitutes specified arsenic oats aliases rice.

Chancellor Rachel Reeves announced successful her autumn fund past twelvemonth that nan authorities was considering widening nan levy.

The alleged sweetener tax, known formally arsenic nan soft drinks manufacture levy (SDIL), applies to manufacturers and was introduced by nan Conservative authorities successful April 2018 arsenic a intends to tackle obesity.

On Monday, nan Treasury besides confirmed proposals to trim nan maximum magnitude of sweetener allowed successful drinks earlier they go taxable to nan levy from 5g to 4g per 100ml.

Some 203 pre-packed milk-based drinks connected nan market, which dress up 93% of income wrong nan category, will beryllium deed pinch nan taxation unless their sweetener contented is reduced successful accordance pinch nan proposals, authorities study says.

The exemption for milk-based drinks was included because of concerns astir calcium consumption, peculiarly among children.

The Treasury said that young group only get 3.5% of their calcium intake from specified drinks, meaning "it is besides apt that nan wellness benefits do not warrant nan harms from excess sugar".

"By bringing milk-based drinks and beverage substitute drinks into nan SDIL, nan authorities would present a taxation inducement for manufacturers of these drinks to build connected existing advancement and further trim sweetener successful their recipes," nan Treasury said.

The authorities estimates that 89% of soft drinks sold successful nan UK are not taxable to nan taxation because of wide reformulation by manufacturers since 2018.

But it added that nan levy had efficaciously created a "target" of conscionable beneath nan 5g threshold, and products had clustered beneath 5g arsenic a result.

The authorities consultation will tally from Monday until 21 July.

The SDIL has raised a full of £1.9 cardinal since its preamble successful 2018, according to authorities statistic released past September. Revenue for HMRC for nan 2023-24 financial twelvemonth was £338 million.

Opponents of nan levy successful caller years see nan soft drinks industry, pubs and disconnected licences. Some reason nan levy disproportionately affects lower-income families and does small to tackle obesity.

On nan latest plans, manufacture assemblage nan Food and Drink Federation said it welcomed nan chance to stock its views successful nan consultation.

It said "significant progress" had already been made and "many years of finance successful investigation and development" had reduced sweetener successful soft drinks by 46% successful nan past 5 years, pinch a 30% sweetener simplification successful pre-packed milk-based drinks successful nan past 3 years.

It added that nutrient and portion manufacturers were facing a bid of inflationary pressures and called connected nan authorities to "continue to create nan correct conditions for businesses to innovate and besides beryllium clear astir their semipermanent goals to beforehand business confidence".