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06 Apr 2018

'Sugar Tax' comes into force – will benefit sports at schools
BY Tom Walker

Revenues from the tax have been ring-fenced to fund sport initiatives and new facilities at schools

Revenues from the tax have been ring-fenced to fund sport initiatives and new facilities at schools

The Soft Drinks Industry Levy has come into effect today (6 April), in a move which the government says will "benefit millions of children across the UK".

Dubbed the 'sugar tax', the levy is a key part of the government’s childhood obesity strategy and was first announced in the 2016 Budget.

The UK joins a handful of nations – such as Mexico, Finland, France and Norway – to have introduced similar taxes.

In England, the new levy revenue will be invested in increasing opportunities for sport in schools, including programmes to encourage physical activity and balanced diets.

The tax was originally expected to raise £520m a year when plans for it were first revealed by then-chancellor George Osborne in 2016.

The tax will raise less than initially expected, however, due to soft drinks companies cutting the amount of sugar they use, meaning that they will escape the full force of the tax.

Estimates by the Treasury based on market data suggest 50 per cent of manufacturers have already reduced the sugar content of their drinks.

As a result, the tax is now expected to raise around £240m each year – less than half of the original estimates.

In his 2017 Budget, however, chancellor Philip Hammond pledged that the government would still increase funding of sport in schools by “the full £1bn we originally expected from the levy” by 2020.

Speaking today (6 April), Exchequer secretary to the Treasury, Robert Jenrick, confirmed that the revenue from the tax would be ring-fenced and spent on sport and healthy living activities at school.

"All revenues raised through the levy will directly fund new sports facilities in schools as well as healthy breakfast clubs, ensuring children lead healthier lives," Jenrick said.

Public Health Minister, Steve Brine, added: "Our teenagers consume nearly a bathtub of sugary drinks each year on average, fuelling a worrying obesity trend in this country.

"The Soft Drinks Industry Levy is a ground-breaking policy that will help to reduce sugar intake, while funding sports programmes."

The tax has already had an effect on the funding of school sports and physical education.

In November 2017, The Department for Education (DfE) announced that funding for PE and sport in primary schools would be doubled to £320m a year thanks to additional revenue from the tax.

The extra funding will result in schools with 16 or fewer eligible pupils receiving £1,000 per pupil and schools with 17 or more eligible pupils receiving £16,000 – with £10 added per pupil.

In Scotland, Wales and Northern Ireland – where devolved governments decide on tax – the way the sugar tax revenue will be spent will be decided using the Barnett formula.

The UK has one of the highest obesity rates among developed countries and the rates are currently getting worse.

By 2050, it is estimated that more than 35 per cent of boys and 20 per cent of girls aged 6-10 are expected to be obese.

The estimated obesity-related costs to the NHS is over £6bn.

The 'Sugar Tax' – who will pay it?

• Drinks with 5g of sugar per 100ml will face a lower rate of tax, 18p per litre

• Those with more than 8g per 100ml will face a higher rate, 24p per litre

• Pure fruit juices will be exempt as they do not carry added sugar, while drinks with a high milk content will also be exempt due to their calcium content

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