Strengthening the Soft Drinks Industry Levy

From:: HM Revenue & Customs, HM Treasury and Department of Health and Social Care
Published: 28 April 2025
Last updated: 25 November 2025 — See all updates

Read the full outcome

Strengthening the Soft Drinks Industry Levy — Summary of responses

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Detail of outcome

The consultation response document includes a summary of feedback received on the proposed changes to the Soft Drinks Industry Levy (SDIL) and confirms the outcome of the consultation:

the government will reduce the current lower threshold at which SDIL applies from 5g of total sugars per 100ml to 4.5g of total sugars per 100ml
the government will remove the current exemption for milk-based drinks with added sugar. A ‘lactose allowance’ will be introduced to account for naturally occurring sugars in milk
the government will remove the exemption for milk substitute drinks with added sugar. Milk substitute drinks without added sugar will remain outside the scope of SDIL. This includes plant-based drinks that only contain sugars derived from their principal or ‘core’ ingredient

A technical consultation on the draft legislation will be published in 2026 and changes to legislation introduced in a subsequent Finance Bill, ahead of the legislation taking effect on 1 January 2028.

Original consultation

Summary

HMRC and HM Treasury are seeking views on proposed changes to the Soft Drinks Industry Levy (SDIL).

This consultation ran from
9:30am on 28 April 2025 to 11:59pm on 21 July 2025

Consultation description

Following the recent SDIL review, this consultation sets out proposals to build on the SDIL’s success in incentivising soft drinks producers to reduce sugar content.

These proposals are:

to reduce the minimum sugar content at which the SDIL applies to qualifying drinks from 5g to 4g. The SDIL 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

The government welcomes your views on these proposals as part of this consultation and your feedback will inform decisions by HM Treasury ministers.

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