Guidance

Check if your drink is liable for the Soft Drinks Industry Levy

Find out which drinks are liable for the Soft Drinks Industry Levy, and how much you may need to pay.

• From: HM Revenue & Customs
• Published: 3 April 2018
• Last updated: 12 April 2023 — See all updates

Before you register for the Soft Drinks Industry Levy, you need to know if the drinks you produce, package, own the brand of, or bring into the UK are liable for the levy. If they’re not, you do not need to register.

If you only dispense drinks into a cup, glass or take away cup, you’re not classed as a packager and do not need to pay the levy.

Drinks that the levy applies to

A drink is liable for the Soft Drinks Industry Levy if it meets all of the following conditions:

• it has had sugar added during production, or anything (other than fruit juice, vegetable juice and milk) that contains 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
• 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 bottled, canned or otherwise packaged so it’s ready to drink or be diluted
• it has a content of 1.2% alcohol by volume (ABV) or less

You’ll also need to pay the levy if the drink is a ‘flavour concentrate’.

You can reformulate your drinks to reduce the sugar content. This may either reduce or remove your drinks’ liability to the levy.

What’s classed as sugar

For the purposes of the Soft Drinks Industry Levy, sugar includes (but is not limited to):

• sucrose
• glucose
• fructose
• lactose
• galactose

It does not include sugar replacements, like:

• stevia
• aspartame
• sucralose

Flavour concentrates

You need to pay the Soft Drinks Industry Levy for liable flavour concentrates packaged in or brought into the UK from 1 April 2023.

A flavour concentrate is a packaged liquid flavouring placed into a dispensing machine to be mixed with sugar, or other ingredients, which is then combined with water, carbon dioxide or crushed ice to dispense a drink directly to a consumer. Other ingredients may include artificial sweeteners and other flavour concentrates.

You have to pay the levy if, when combined and mixed in a dispensing machine, the dispensed soft drink contains at least 5g of sugar per 100ml and has a content of 1.2% ABV or less.

Work out the levy for flavour concentrates

Flavour concentrates will have dispensing instructions which will tell you how much levy you’ll pay based on the sugar content per 100ml of the dispensed drink. The instructions will also tell you the volume of dispensed drink the flavour concentrate can make.

If you use 2 or more concentrates to make the dispensed drink, the liability to the levy will be apportioned between each of the flavour concentrates.

You’ll need to know the number of concentrates used to produce the finished drink and the volume each concentrate makes before you declare.

For example volume divided by 2 where there are 2 flavour concentrates, or volume divided by 3 where there are 3 flavour concentrates.

Example

Flavour concentrates A and B are mixed together with added sugar when they are dispensed. Each flavour concentrate is capable of producing 20 litres of dispensed drink when combined.

The apportionment is the total dispensed volume divided by the number of flavour concentrates, so 20 divided by 2.

When declaring the volume for flavour concentrate A, you would declare 10 litres on your Soft Drinks Industry Levy return.

When declaring the volume for flavour concentrate B, you would declare 10 litres on your Soft Drinks Industry Levy return.

Drinks that are not liable for the levy

Liable drinks packaged or brought into the UK before 6 April 2018 aren’t included in the levy.

The levy does not apply to drinks that are:

• at least 75% milk
• a milk substitute, like soya or almond milk
• an alcohol replacement, like de-alcoholised beer or wine
• made with fruit juice or vegetable juice and do not have any other added sugar
• liquid drink flavouring that’s added to food or drinks like coffee or cocktails
• sold as a powder
• prepared by mixing liquids and served in an open container, like cocktails
• infant formula, follow on formula or baby foods
• formulated food intended as a total diet replacement, or dietary food used for special medical purposes

Milk and milk based drinks

For your drink to be classed as milk or a milk based drink, it must contain at least 75ml of milk per 100ml of prepared drink.

For the purposes of the levy, types of milk include:

• milk from an animal
• reconstituted or recombined milk
• fermented milk
• buttermilk
• whey
• reconstituted or recombined whey

Cream is not included in the definition of milk.

Milk substitute drinks

For your drink to be classed as a milk substitute drink, it must:

• contain at least 120 milligrams of calcium per 100ml
• come from legumes, cereals, nuts, seeds or another type of plant
• have all or most of the same uses as milk
• have a similar consistency to milk
• not be carbonated

Alcohol replacement drinks

For your drink to be classed as an alcohol replacement drink, it must be all of the following:

• advertised and sold as a direct replacement for a particular type of alcoholic drink
• in packaging that’s similar to the alcoholic drink it’s intended to replace
• marketed in a way that’s similar to the alcoholic drink it’s intended to replace
• not marketed in a way that targets or particularly appeals to people who are under the age of 18

Your drink must also be one or more of the following:

• made from an alcoholic drink through de-alcoholisation, which reduces the ABV to 1.2% or lower
• made by blending cider, beer, wine or other alcoholic drink with fruit juice (with or without the addition of water and other ingredients), to make a soft drink that’s similar to the alcoholic drink used in its production
• made through fermentation or distillation, during which:
  • alcohol is produced
  • the ABV never goes over 1.2%
  • the drink is not diluted or mixed with anything else, apart from anything that’s been dissolved into the drink through distillation

What’s classed as fruit juice

For the purposes of the levy, fruit juice includes (but is not limited to):

• fruit puree
• dehydrated fruit juice
• powdered fruit juice

It does not include de-ionised fruit juice or juice drinks with added sugar.

How much you’ll pay

The amount you’ll pay depends on which band your liable drink is in.

You’ll pay:

• 18 pence per litre on drinks that have a total sugar content of 5g or more and less than 8g per 100ml
• 24 pence per litre on drinks that have a total sugar content of 8g or more per 100ml

When the levy is due on liable drinks

For liable drinks packaged in the UK, you need to report the drinks in the same reporting period that they leave the premises they were packaged in, unless they’re moved to a registered warehouse. In this case, the levy becomes due once the drinks leave the registered warehouse.

If the liable drinks are made available for sale (or free of charge) at any time, the levy becomes due at that point.

Find out more information about who pays the levy on liable drinks brought into the UK.

When drinks are classed as being made available for sale or free of charge

Drinks are considered to be ‘made available for sale’ (or free of charge) when they’re allocated to a particular supply to a customer.

Drinks that are stored as part of your general stock on hand are not considered to be made available.

Depending on your stock management system and your arrangements with your customers, your stock on hand may be allocated to a particular supply when they’re:

• set aside in your premises
• dispatched from your premises
• delivered to your customer

Who pays the levy

For liable drinks packaged in the UK, the packager must report and pay the levy.

Find out more information about who pays the levy on liable drinks brought into the UK.

Who needs to register for the levy

Find out if you need to register for the Soft Drinks Industry Levy.

Published 3 April 2018
Last updated 12 April 2023 + show all updates

1. 12 April 2023

   Information around flavour concentrates has been added which became liable for the Soft Drinks Industry Levy on 1 April 2023.

2. 3 April 2018

   First published.