TC09583 - [2025] UKFTT 00865 (TC)

SDIL was introduced with effect from 6 April 2018. It is a levy applied to UK produced or imported soft drinks containing added sugar. Its introduction was announced in the March 2016 Budget, and it came into force from April 2018. The levy is paid to HMRC by either the packager for drinks produced in the UK or the importer for drinks produced overseas. No levy is charged on soft drinks containing less than 5g of sugar per 100ml. It was charged at 18p per litre on soft drinks containing between 5g and 8g of sugar per 100ml (lower band rate) and at 24p per litre on soft drinks containing more than 8g of sugar per 100ml (higher band rate).

SDIL was introduced and was central to the 2016 childhood obesity strategy. Its primary aim was to incentivise soft drink reformulation to lower sugar recipes. This was reflected in the design of the regime which provided that manufacturers were given two years between the levy’s announcement and implementation to allow them to reformulate before it became active. Further the tiered structure was targeted at the highest sugar brands and incentivised sugar reductions.

Producers and importers of soft drinks liable to the charge to SDIL are required to register with HMRC and are subsequently liable to report and pay SDIL on the drinks produced or imported for consumption in the UK. As SDIL is intended to tax consumption, SDIL credit can be claimed in specified circumstances where the liable drinks are exported from the UK or where the chargeable soft drinks are lost or destroyed.