Tax & admin · 12 October 2016

Pressure mounts on government to scrap proposed soft drinks tax

soft drinks tax
The propose soft drinks tax includes a levy on every drink containing more than five grams of sugar per 100ml

A pressure group campaigning against the introduction of the proposed soft drinks tax has heaped further pressure on the government to rethink its policy.

The Face the Facts: Can the Tax coalition has delivered 2,000 signatories from newsagents, small business owners and publicans to the government, urging the chancellor to scrap the incoming levy, due to be introduced in April 2018.

The soft drinks tax was announced by former chancellor George Osborne in his March 2016 Budget in an attempt to combat the rising levels of obesity in Britain. The plans suggested a levy on every soft drink containing more than five grams of sugar per 100ml.

In an official statement from the National Federation of Retail Newsagents (NFRN), CEO Paul Baxter highlighted the impact of the tax on the profits of small firms.

“Most newsagents are family run businesses, meaning that losing thousands of pounds a year in revenue is going to hit them hard. The chancellor needs to scrap the tax now,” he warned.

An Oxford Economics report into the proposed levy suggested that the soft drinks tax could put up to 4,000 jobs at risk in sectors such as hospitality and retail.

The independent study also reported that the tax could cost the UK economy up to £132m in GDP contributions from such industries.

Voices from the drinks industry further questioned the tax. Gavin Partington, director general of the British Soft Drinks Association, urged the government to take action and protect potential job losses in the UK.

He said in a statement: “The government is irresponsibly putting 4,000 jobs across the country at risk for a tax which research shows will only reduce calorie intake by five calories per person per day.”

Despite the increased pressure from groups representing small businesses set to be affected by the soft drinks tax, the World Health Organisation (WHO) this week called for a worldwide commitment to increasing the prices of sugary drinks in its fight against global obesity.

In a report released in conjunction with World Obesity Day, the organisation suggested a 20 per cent increase on the retail costs of sugary drinks to reduce consumption.

In a statement, Dr. Douglas Bettcher of the WHO stressed the negative effect of soft drinks on the world’s health.

“Consumption of free sugars, including products like sugary drinks, is a major factor in the global increase of people suffering from obesity and diabetes,” he warned.

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Praseeda Nair is the editorial director of Business Advice, and its sister publication for growing businesses, Real Business. She's an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.

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