If your business produces, packages or brings into the UK soft drinks with added sugar you may need to register for the Soft Drinks Industry Levy from 6 April 2018.
To work out if you’ll need to register and pay the Soft Drinks Industry levy you’ll need to decide whether the drinks you produce, package or bring into the UK are liable.
A drink is liable if it meets all the following conditions:
- it has a content of 1.2% alcohol by volume or less
- it’s either ready to drink, or to be drunk it must be diluted with water, mixed with crushed ice or processed to make crushed ice, mixed with carbon dioxide or a combination of these
- it’s packaged ready for sale
- it has had sugar added during production, including pure cane sugars like sucrose and glucose as well as substances (other than fruit juice, vegetable juice and milk) that contain sugar, such as honey
- it contains at least 5 grams (g) of sugar per 100 millilitres (ml) in its ready to drink or diluted form
A drink is exempt if it meets one of the following conditions:
- it contains at least 75% milk
- it’s a milk-substitute which contains at least 120 milligrams of calcium per 100ml, for example soya or almond milk
- it’s an alcohol replacement drink, for example de-alcoholised beer or wine
- it’s infant formula, follow-on formula, baby foods, formulated food intended as a total diet replacement or dietary food used for special medical purposes
You can reformulate your drinks to reduce the sugar content, which may either reduce or remove your drinks’ liability to the levy.
Who has to register
Your business must register if you:
- have produced more than one million litres of liable drink in the last 12 calendar months for your own brand or brands you have the rights to manufacture
- bottle, can or otherwise package liable drinks for someone else
- bring liable drinks into the UK from anywhere else, including the Isle of Man and Channel Islands
You must keep copies of invoices and other sales documents.
If you produce less than one million litres of liable drink
You’re a small producer and don’t need to register if all the following apply:
- you only package your own liable drinks
- you produced less than one million litres of liable drink in the last 12 calendar months
- you won’t produce more than one million litres in the next 30 days
You can register voluntarily if any of your liable drinks are packaged by a third party in the UK. You’ll get a registration number. If you give this number to your third party packager, the drinks they package for you won’t be liable.
Check if you need to register for the Soft Drinks Industry Levy.
How and when to register
From 6 April 2018 you’ll need to register within 30 days of the end of the month in which you:
- first need to report drinks that you have packaged or brought into the UK
- produce more than one million litres of liable drinks in the previous 12 calendar months
You’ll be registered from the first day of the month after the month you first needed to register.
You’ll also need to register within 30 days of the date that you know you’ll:
- need to report liable drinks that you will package or bring into the UK in the next 30 days
- produce more than one million litres in the next 30 days
You’ll be registered from the date you know you’ll need to report the liable drinks.
You only need to register once.
If you need to register under more than one of these rules, you’ll need to follow whichever rules require you to register the earliest.
You’ll need to know:
- the volume in litres (at each rate) of any liable drink you:
- package for your own brand or brands you have the rights to manufacture
- package for your customers
- have packaged for you by a third party
- bring into the UK
- the addresses of any packaging sites you operate to package liable drinks
- the addresses of any warehouses you want to register to store liable drinks - this will make them registered warehouses
Report and pay
When a drink becomes liable for the levy you’ll need to report it to HM Revenue and Customs (HMRC) in a quarterly return and pay the levy due. These will be fixed quarterly returns ending June, September, December and March.
Drinks packaged in the UK
You need to report liable drinks you package in the UK, unless you’re a small producer and you only package your own drinks.
If you package liable drinks for a small producer you still need to report and pay the levy on the drinks. But if the small producer has registered and given you their registration number, you can claim an exemption from paying the levy on these drinks.
You need to report the liable drinks when they leave the place they were packaged, unless they’re:
- sent to a registered warehouse - you report them and pay the levy when you move them to an unregistered warehouse or make them available for sale
- made available for sale or free of charge before they leave the place where they were packaged or a registered warehouse - you report them and pay the levy when they’re made available
Drinks brought into the UK
If you buy liable drinks from a supplier outside the UK before they’re brought into the UK, you report them and pay the levy when they’re first received at your business premises.
If your business premises is a registered warehouse you won’t report the liable drinks or pay the levy until you move them to an unregistered warehouse or make them available for sale.
If you make liable drinks available for sale or free of charge after they’re brought into the UK, you report them and pay the levy when you make them available (if they’ve not first been received at a premises operated by anyone that sells soft drinks).
You don’t have to pay the levy on liable drinks (but must report them) if they’re produced by small producers who are:
- outside the UK
- inside the UK and use packagers outside the UK
You’ll need to get evidence that they’re a small producer to claim an exemption from paying the levy on those drinks.
How much you’ll pay
The amount you pay depends on the total sugar content of the drink. You’ll pay:
- 18p per litre if the drink has 5g of sugar or more per 100ml
- 24p per litre if the drink has 8g of sugar or more per 100ml
You’ll need to send returns to HMRC every quarter. The first returns are due in July 2018.
Lost or destroyed drinks
If you paid the levy on liable drinks which are then lost or destroyed you can claim a credit for those drinks.
You must keep a record and evidence for every loss or destruction of liable drinks you claim a credit for.
You can claim credits for liable drinks lost or destroyed by someone else, but you must have documentation to prove that the event took place.
If you paid the levy on liable drinks that have been exported, you can claim a credit for those drinks.
You can claim a credit for drinks that were exported by someone else, but you must have documentation confirming the export took place.
You will need to keep a record and evidence of each export.