Sugar tax: what you need to know

Milkshakes and lattes will be included in the government’s sugar tax scheme for the first time in the UK in a renewed bid to help tackle obesity.

The sugar tax, formally known as the soft drinks industry tax (SDIL), is a tax on pre-packaged drinks, such as those sold in cans and cartons in supermarkets.

The extension of the sugar tax to milk-based drinks will take place from April 2028.

The government says companies that make these drinks will have to reduce the sugar they contain or pay the tax.

That means they might taste different (less sugary) or cost a little more.

The tax was introduced by the Conservative government in April 2018 as a means to make diets healthier and combat obesity, by reducing sugar consumption.

The sugar tax applies to pre-packaged soft drinks with added sugar.

It already applies to most sugary soft drinks and fizzy drinks sold in cans, bottles and cartons in supermarkets.

It will now also apply to pre-packaged milk-based sugary drinks sold in supermarkets, such as milkshakes and lattes.

Milk-based drinks have been exempt from the sugar tax because they contain calcium, which is encouraged in the diet of children and young people.

However, the high sugar content of some milk-based drinks means the government has removed that exemption.

The government has consulted on introducing a “lactose allowance” to take into account the natural sugars in the milk content of these drinks.

All milk substitute drinks, such as soy, almond or oat milk, were previously exempt from sugar tax if they contained 120 mg of calcium per 100 ml.

But if these drinks contain added sugars in addition to those derived from the main ingredient, they will now be subject to tax.

The sugar tax does not apply to drinks made and served in cafes, restaurants and bars. Therefore, coffees, lattes and other dairy beverages made on the cafeteria premises would not be subject to this tax.

Soft drinks made only with natural sugars, such as cow’s milk and pure fruit juice, are also not part of the tax.

Non-alcoholic beer or wine, infant formula, powdered beverages, and cocktails or mocktails served in open containers also do not fall within the scope of the sugar tax.

The tax is currently charged at 18p per liter on drinks containing at least 5g of total sugar per 100ml, and 24p per liter on drinks containing 8g of sugar or more.

But the government is reducing the maximum amount of sugar allowed in drinks. Instead of 5 g, the limit will be 4.5 g per 100 ml.

To date, this has resulted in a 46% reduction in the sugar contained in the affected soft drinks, the government claims.

Almost 90% of the market now contains less sugar than the level at which the tax applies.

But experts say there is still too much sugar in the UK diet.

Free sugars should make up no more than 5% of daily energy intake, according to current UK recommendations.

But the amount of sugar consumed in the UK is around double that. And obesity rates in children and adults show no signs of slowing either: almost two-thirds of people in the UK are overweight or obese.

This is what has led the Government to review the tax and extend it to milk-based drinks.