Since the 6th of April 2018, there has been a new taxation law in effect, adding 20 percent tax to sugary drinks such as Coca-Cola and Pepsi to stimulate a healthier lifestyle without a high sugar intake. It has been a divisive new regulation – many people have taken to social media to voice their discontent with the new tax. On this page, we shall look what this new regulation could lead to – in the long term and short term.
The History of Sugar Tax Regulations:
The announcement to introduce a sugar tax happened in 2016, as the government rolled out the “Soft Drinks Industry Levy”. Manufacturers are taxed based on the sugar content of their product. If a drink has a sugar content of more than 5g per 100ml, there will be an extra tax of 18p to the litre. For drinks that cross the threshold of 8g per 100 ml, there will be a tax of 24p per litre.
The United Kingdom is not the first country to introduce a sugar tax. Mexico introduced such a law back in 2014 to tackle increasing obesity in the country and has seen a 7 percent decrease in the consumption of sugary drinks according to a research carried out in December 2017. Other countries who have implemented a similar
The Benefits of the Sugar Tax.
In many ways, many people could benefit from this tax. That could be you personally- and from a business perspective. As a study by the Telegraph has shown, nearly 20 billion pounds in productivity are lost through obesity – and there is a chance your company could be affected by this. If your employees lead a healthier lifestyle and prolong their lives by consuming less sugar, you can expect productivity in your office to soar.
To add to that, as there will most likely not be a full stop in the consumption of sugary drinks. That means that the consumption of sugary drinks could raise half a billion pounds in revenue for the government which could lead to investment in other aspects that could be beneficial for you as an owner of a small company.
If you are involved in the soft drink industry- there is a chance you might see your company register small losses in the short term. However, you could turn that around in the long term by looking into sugar free alternatives.
Are you a business owner who is affected by these new regulations, and need financial advice to counter these losses? Contact your local The Financial Management Centre today
Posted on Wednesday, June 27th, 2018 at 3:33 pm in Latest News.