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

Published 2 months ago• 5 minute read

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.

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

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.

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

It does not include sugar replacements, like:

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.

Liable drinks packaged or brought into the UK before 6 April 2018 are not included in the levy.

The levy does not apply to drinks that are:

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:

Cream is not included in the definition of milk.

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

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

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

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

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

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

You’ll pay:

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.

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: