It could raise costs all round: The tax is levied on soft drinks companies – not the drinks themselves. The report was well received by sugar tax campaigners such as Action on Sugar and celebrity chef Jamie Oliver. The country introduced its tax on sugar-sweetened beverages (SSBs) in January 2014 to combat its huge obesity crisis – with more than 70% of the population overweight or obese. It will be a major change in health and tax policy. With the wider range of other sugary foods available besides soft drinks, some argue the tax won’t have any impact on obesity rates at all. The tax’s poor design means it fails to penalise the drinks with the higher sugar content. Price is a major factor in purchase choices, and the plan is that the sugar tax can act as a deterrent, leading to healthier drink options. The sugar tax introduced this week in the UK is … The question also remains as to how it might harm profits from drinks sold, bottled, or made in the UK. In July 2015 the British Medical Association (BMA) urged the governmentto introduce a 20 per cent tax on sugar, saying it would combat escalating rates of obesity and type 2 diabetes. A primary aim is to highlight common risk areas as a better understanding can contribute to a reduction of errors and help to minimise penalties. The levy will be applied to water-based soft drinks that contain added sugar. The new, so-called sugar tax has been a contentious issue since it was first raised. %%EOF A recent article in the Guardian noted that ”more than 70% of the population is overweight or obese — and sugar consumption. Bad debt relief allows businesses, that have made supplies on which they have accounted for and paid VAT but for which they have not received payment, to claim a refund of the VAT by reference to the outstanding amount. On 6 April the UK will join the small number of countries which have introduced a tax on sugary drinks as part of an anti-obesity policy. 1293 0 obj <> endobj Many studies have looked at the potential benefits of a sugar tax in terms of the longer, healthier lives and reduced health expenditure associated with … This reduction in consumption is expected to lead to almost 200,000 fewer type 2 diabetes cases, over 20,000 fewer strokes and heart attacks, and 18,900 fewer deaths by 2022. VAT registered businesses act as unpaid tax collectors and are required to account both promptly and accurately for all the tax revenue collected by them. h�b```�f6v``C�# � @1�;�^0�ir�b������J��ܒܭܩ�i�r܅����Orr�p�g`�x�)�*�>��(� G{X�Gʌ�д��0�VW�����Ba���\3f� �s��d�r�L��ҙ�&� The drinks industry is another collective of those who believe the taxes are discriminatory. The government’s new so-called sugar tax is a subject almost guaranteed to spark some fizzing debate. A sugar tax is a tax on sugary drinks, also called a Sugar Sweetened Beverage Tax (SSBT). It placed one peso a litre on all SSBs, as well as an 8% tax on foods high in sugar, salt and fat. Many of these brands, including Fanta, Sprite, Dr Pepper, Lilt and Oasis, we reformulated before the new tax was announced, so the changes made to the recipes were modest.Unlike many brands, we didn’t have to halve the sugar content in one giant leap. Is it a fundamental move in the fight against obesity or a toothless one-trick pony that will do little more than force fizzy drinks fans to fork out a little more for their sugary beverages? We are on hand for accounting advice. The United Kingdom has recently joined France, Hungary, Chile and Mexico in introducing a SSBT. Design Modelling study. Click edit button to change this text. !�!�I�E �T�(z$l� In the UK, drinks are already labelled with how much sugar a drink contributes to their recommended daily allowance. The most immediately obvious benefit, and that which most would wager, is the primary cause of the tax is the potential improvement of the nation’s health. This factsheet focuses on VAT matters of relevance to the smaller business. Some even claim that the new tax may be good for growing businesses. While some argue that a tax on sugar is a discriminatory tax against the obese, others like Heston Blumenthal argue it doesn’t go far enough. Britain's sugar tax is a sweet idea. In this article, we take a look at some of the sugar tax pros and cons uk. Sugar‐sweetened beverages—including soda, fruit punches, sports drinks, energy drinks, sweetened tea, and other carbonated or uncarbonated drinks that are sweetened with sugar, corn syrup, or other caloric sweeteners—are the largest source of added sugar in the American Cash accounting enables a business to account for and pay VAT on the basis of cash received and paid rather than on the basis of invoices issued and received. 1313 0 obj <>stream In March, 2016, the UK Government proposed a tiered levy on sugar-sweetened beverages (SSBs; high tax for drinks with >8 g of sugar per 100 mL, moderate tax for 5–8 g, and no tax for <5 g). Venture Capital Trusts (VCTs) are complementary to the Enterprise Investment Scheme (EIS), in that both are designed to encourage private individuals to invest in smaller high-risk unquoted trading companies affected by the equity gap. Drinks covered under a soda tax often include carbonated soft drinks, sports drinks and energy drinks. This policy intervention is an effort to decrease obesity and the health impacts related to being overweight, however the medical evidence supporting the benefits of a sugar tax on health is of very low certainty. %PDF-1.5 %���� Lorem ipsum dolor sit amet consectetur adipiscing elit dolor. Some, including many doctors and celebrity chef Jamie Oliver, have been in support with calls for a tax against sugary drinks since 2014. The higher price could encourage people to check the nutritional values and ingredients to see why, exactly, the price is raised. There are those who believe all sugars should be taxed, not just sugary drinks. Hr�. With the major drinks producers seeing rising prices in their goods, it could pave more room for the growing market of healthier drinks from newcomers. The tax in France made a small influence on sales figures so how can the UK government be sure that a tax on UK sugar products would have a more notable result? It might take some time for the data to show whether it has any long-term effects on obesity rates or not. Arguments against sugar tax. endstream endobj 1294 0 obj <. It’s going to impact individuals and businesses alike, but is it for the better or not? @A��B@��� ��h`ˀ(C�J8G��J �Xa�g�����Q@����=o��#������ ��d`V�� Parke Wilde, a professor at the Friedman School, helped lead a study of who pays and who benefits from a national sugar-sweetened beverage (SSB) tax. Only time will tell. It is quite possible within the VAT system for a business to be in the position of having to pay over VAT to HMRC while not having received payment from their customer. Recommended to you based on your activity and what's popular • Feedback 1. The results provide potential hints of optimism about the effect of similar strategies in other countries—including the UK, where a levy on sugary drinks is set to take effect in April, 2018. The tax has its fair share of detractors, including those addressing the health angle of it. The amount of tax levied per litre will depend on the sugar content of the drink. Introduction. The benefits of a tax on sugar in the UK is defined first and foremost by its effectiveness in reducing problems associated with high sugar consumption, and then … The UK has a well-publicising obesity epidemic, and many are hoping the tax can reduce sugar consumption; one of the primary causes. It leads to job losses. The tax has supporters and detractors from every side. Public health advocates say an SSBT in Australia and New Zealand could help reduce consumption of SSBs and thereby reduce obesity and other associated diseases. �k@�-�`qL�@�5$�$���D�d Q�����:�b``$������ t� But there is evidence – limited but accumulating – from some of the 15 countries that already have a sugar tax that it reduces consumption of heavily sugared products. ~F�~/fuA ���`og� �"����� �KqK Will it pave a new niche for smaller businesses, or will the loss in profits and proposed legal action by soft drinks companies spell only more trouble? The health of children will benefit most from the sugar tax on the UK soft drinks industry, according to a study. The findings suggest that a sugar tax would result in 30% more health and economic benefits than a volume-based tax. Objective To estimate the impact of the UK government’s sugar reduction programme on child and adult obesity, adult disease burden, and healthcare costs. Mexico continues to build on the success of its tax on sugary drinks, with new analysis showing further reductions in sales of sugar-sweetened beverages in the second year after its implementation. There are arguments that a price raise alone won’t curb consumption. We also decided to change the recipe of other brands in our portfolio, to lower their sugar content. It predicted if sugar was cut … Benefits Taxes on sugary drinks help reduce consumption and prevent obesity • Taxation on sugary drinks is an effective intervention to reduce sugar consumption (8). Suite 6 Dukes House All the evidence shows that sugar taxes decrease purchases and curb obesity– but restricting price promotions and junkfood advertising could have an even bigger impact, concludes Public Health England's report to the UK government. h�bbd``b`. Setting Simulated scenario based on National Diet and Nutrition Survey waves 5 and 6, England. The 'Sugar Tax' will help to reduce sugar in soft drinks and tackle childhood obesity. Under the scheme a set percentage is applied to the turnover of the business as a one-off calculation instead of having to identify and record the VAT on each sale and purchase you make. “More than 70% of the added sugar in the diet comes from sugar … Major drinks manufacturers have claimed that the tax will unfairly harm their profitability, leaving them disadvantaged against competitors. In his March 2016 Budget Statement, the UK Chancellor of the Exchequer (minister of finance) announced a Soft Drinks Industry Levy (SDIL) to be implemented in April 2018.1 The levy is imposed on industries importing or manufacturing sugar-sweetened beverages (SSBs) and includes two ‘tiers’. Another key ingredient in achieving that aim is good record keeping, otherwise there is an increased risk that the VAT return could be prepared on the basis of incomplete or incorrect information. The government has proposed two tax bands: one for drinks with more than 5g of sugar per 100ml and a higher band for drinks which contain more than 8g of sugar per 100ml. While the EIS requires an investment to be made directly into the shares of the company, VCTs operate by indirect investment through a mediated fund. A ‘fat tax’ is a specific tax placed on foods which are considered to be unhealthy and contribute towards obesity. 0 Some have even threatened legal action against the government should the tax pass, but nothing has come of that yet. If firms choose to cut the sugar content of soft drinks, the biggest beneficiaries will be children, they write. It is unfair on low-income groups. It’s too early to draw any conclusions about the impact of the sugar tax on patterns of obesity in the UK, but if the tax continues to have its intended effect then the benefits could be very significant. The impact on public health of the UK's sugar tax will depend on industry's response to it, according to the authors of a Lancet study. The sugar tax is welcome and, given soaring obesity rates, long overdue. Recently the head of Weatherspoons claimed ‘Jamie Oliver’s plans for a sugar tax would costs pubs millions of pounds and ... 2. Participants 1508 survey respondents were used to model weight change among the population of England aged … Windsor SL4 1LD, Management Accounting & Financial Modelling, VAT – Seven Key Points for the Smaller Business. Just two weeks later a University of Cambridge study highlighted why a sugar tax could be so beneficial. In prior studies, a hypothetical national tax of $.01 per ounce was estimated to result in more than $20 billion of savings in health-care costs over ten years. The UK has a well-publicising obesity epidemic, and many are hoping the tax can reduce sugar consumption; one of the primary causes. We highlight below some of the areas that you need to consider. • Evidence shows that a tax on sugary drinks that rises prices by 20% can lead to a reduction in consumption of around 20%, thus preventing obesity and diabetes (9). Their researchers discovered t… Others have been hoping PM Theresa May would reverse her position before the due date, since it was first announced. “Once there is agreement to tax sugar-sweetened beverages, it … As a … April 6, 2018, has come and gone however, so the tax is now officially in effect. Ignorance is not an acceptable excuse for not complying with the rules. The UK Sugar Tax Pros. Mexico introduced a 10% tax on sugary drinks and saw a 12% reduction over the first year. endstream endobj startxref We estimate the effect of possible industry responses to … With regards to diabetes prevalence, one study from the USA estimated that a ‘one penny per ounce’ tax (equating to around 25p per litre in the UK) could reduce diabetes by 2.6% among 25-64 year olds, and this association was found to be independent of reductions in body mass index (BMI) 38. It is argued that the … In addition, the purpose of this tax is to try and reduce national BMI so evidence is needed that a drop in sales would lead to a drop in obesity. The scientists estimated the impact on rates of obesity, type 2 diabetes and tooth decay according to best and worst-case scenarios of three potential industry … The flat rate scheme for small businesses was introduced to reduce the administrative burden imposed when operating VAT. The new rules, which were introduced in April 2018, mean that people in the UK could have to pay slightly more if they want to buy a drink that has over a certain amount of sugar in. 1303 0 obj <>/Filter/FlateDecode/ID[<6A7D13146851EA45A837FBB53257C844><60AC3B9BBC7F7C45839CE25F9BCD4BF8>]/Index[1293 21]/Info 1292 0 R/Length 67/Prev 227203/Root 1294 0 R/Size 1314/Type/XRef/W[1 2 1]>>stream � �_:��������! Free market think tanks and the food industry may grouse, but similar measures have reaped benefits when they've been … What’s more, the increase in price could urge more consumers to become conscious of what, exactly, is in their drinks. The argument is that a fat tax would encourage healthier eating and raise revenue to be spent on public health care. The tax could be placed on foods high in sugar/fat, such as crisps, chocolate and deep fried takeaways. 4-6 High Street The VAT system is policed by HMRC with heavy penalties for breaches of the legislation. Others argue about just how effective the tax will be. For example, one study looked at the effects of a gradual reduction in sugar content of sweetened beverages by 40% over five years. A 20 percent tax on sugar-sweetened drinks would result in widespread, long-lasting public health benefits and significant health cost savings, a new study shows. The most immediately obvious benefit, and that which most would wager, is the primary cause of the tax is the potential improvement of the nation’s health. We understand that running a business during these testing COVID-19 times can be confusing and stressful. A snack tax of 20 per cent on sweets, cakes and biscuits would be more effective than the current levy on sugary drinks, say experts. This new tax could further the accessibility of that information to the public at large. 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