Sugar tax calculator
Welcome to our Sugar Tax Calculator. This tool will help you work out whether your drink could be taxable by the soft drink levy introduced in 2018. There are two bands, one for sugar content above 5g per 100ml and a second for drinks with 8g per 100ml. Enter your details below and let us do the leg work for you…
To find out if your drink will attract sugar tax, enter your details into our clever calculator below and we’ll tell you if it will attract any tax and how much…
UK Sugar Tax - The Impact on Drink Brands
The sugar tax, or more accurately, ‘The Soft Drinks Industry Levy’ (SDIL), was first proposed in March 2016, to tackle obesity and diabetes. In England, an average of one in three children left primary school obese in 2017, as reported by the BBC. The introduction of the tax was a huge disruption for the soft drinks industry, and many drinks manufacturers felt unfairly targeted. Huge amounts of sugar are also in snacks, breakfast cereals and other foods, yet these products were not included.
Between March 2016 and when the tax came into force, in April 2018, the soft drinks industry did an incredible job of reformulating thousands of drinks to be below the taxable sugar level, cutting out approximately 45 million kg of sugar per year. Products such as full sugar Pepsi and Coca Cola were unchanged; however, their diet alternatives became a key focus – Pepsi Max, Diet Pepsi, Coke Zero and Diet Coke. These brands substituted the sugar for high intensity sweeteners (Acesulfame K and Aspartame).
How much is UK Sugar Tax?
There are two bands of sugar tax. One is at 5g of sugar per 100ml and the other is at 8g of sugar per 100ml. To put this in perspective Coca Cola has 10.6g of sugar per 100ml, a typical US Fanta has 13.5g of sugar per 100ml and diet drinks have zero sugar. You will notice many drinks are around 4.8g of sugar as 4.9g is the maximum sugar a drink can have per 100ml without incurring the tax. In addition, sugar can invert over time, which can potentially take products over the 5g per 100ml sugar tax level.
At 5g of sugar per 100ml, the tax is 18p per litre. Over 8g of sugar per 100ml, the tax is 24p per litre. Check out the Simpsons sugar tax calculator to see what tax is charged on each drink.
What is the Sugar Tax on Post Mix Syrup?
The tax on a 10L full sugar bag in box of post mix syrup (with a dilution ratio of 1:5) is £14.40 on the top band of sugar tax. This is because the tax is calculated on the total ready to drink litres, which would be 60 litres. This would make 300 (200ml) servings.
Which other countries have sugar tax?
Around 52 other countries in the world have a sugar/sweetened sugar tax with the tax level and method of administrating varying greatly. Saudi Arabia’s sugar tax level is 50% and Mexico’s sugar tax is 1 peso per litre, which equates to around 10%.
Not following the correct procedure around the sugar tax can result in a prison sentence of up to 12 months and up to £20,000 fines.
Low Sugar Drinks Are Cheaper
In many ways the tax was a blessing for consumers as diet/lower sugar products are cheaper (in most instances) to produce which has meant a reduction in retail prices. In 2019/2020 the UK government raised £33 million in sugar tax. Considerably less than the £530m per year it was first estimated to raise by the UK Treasury. This is testament to the massive amount of sugar reduction and reformulation work carried out, removing sugar on an epic scale. This money was to be spent on tackling the obesity crisis in schools by providing healthier meals and supporting school sports. Therefore, in many ways the UK sugar tax has been a win-win for the consumers and drinks manufacturers alike.
The Practical implications of UK Sugar Tax for Drink Brands
The tax presented a problem for slush syrup brands as sugar was the freeze depressant causing the product to turn to slush in the machine rather than freeze solid. This was overcome by using glycerine, a freeze depressant derived from rapeseed. At Simpsons Beverages, we have seen a huge movement towards sugar free slush options with consumers now preferring the taste. Brands such as Tango Ice Blast and Polar Crush are now totally sugar free.
Post mix drink dispensers were recalibrated, as the sugar in the products effects viscosity and hence the dosage in the machine. No sugar drinks tend to have a thinner mouth feel. Some drinks manufacturers added gum thickeners to compensate.
Has the UK Sugar Tax Worked?
From our observation, the reduction of sugar in drinks has been polarising with many people switching from their full sugar coke to zero or similar. On the other end of the scale, there has been a surge in imported high sugar drinks such as Calypso, US Fanta, and AW Root Beer. Drink brands such as these incur the sugar tax at the point of import as with alcohol and tobacco.
According to Beverage Daily (2021), demand for high sugar energy drinks did not fall despite the considerably higher prices.
AG Barr had huge pressure from consumers when they reformulated their popular IRN Bru with many consumers stockpiling the original IRN Bru (Scotland’s most iconic soft drink).
Does the UK sugar tax apply to all soft drinks?
One little known fact is that there is a small producer’s exemption. This allows small drink brands to produce/have produced 1 million litres of sugary drink per year without incurring the tax. Small drink brands still need to register and submit quarterly records of their liable product volumes. If production exceeds the limit the tax is payable on the entire volume.
Sugar tax does not affect milk drinks although some milk drinks can be quite sugary, such as Yazoo which is 8.6g of sugar per 100ml for the chocolate version. Alcoholic drinks are also exempt from the tax providing they are over 1.2% ABV. The tax does not apply to juice drinks containing only natural sugars. Natural sugars in juice are high i.e. Tropicana has 8.4g of sugar per 100ml and a typical pure apple juice has 11.1g of sugar per 100ml. If any sugar is added to these products the total sugar including natural sugars is taxable.
Sugar tax is not applicable for products made for export.
Drink preparation syrups are affected, however coffee syrups and cocktail syrups are not included even though many are high sugar.
Soft drinks in powder form are not currently affected as this category is very small in the UK, however HMRC are monitoring this and may amend legislation in the future.
Which Sugar Alternatives can be used in Drink manufacturing?
The UK consumer’s pallet has evolved and many now prefer less sweet drinks. Colourful, sweet, flavoured drinks are often reminiscent of the 1980’s, however consumers do often require a certain level of sweetness. With the reduction of sugar, this gap is typically made up by the following sweeteners-
|Sweeteners||Approximately how many times sweeter than sugar|
The sugar reduction movement has been very successful in the removal of sugar in soft drinks. This has no doubt done its bit to prevent many sugar related health issues. It will be interesting to see the long-term trend as many drinks manufacturers switch from sugar to artificial sweeteners. This is a whole new issue as many consumers are sceptical of the long term effects of artificial sweeteners.