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Sugar tax making half as much as money as the Government expected

The Telegraph logo The Telegraph 21/11/2018 Katie Morley
It is estimated that today’s children and teenagers are consuming three times the recommended level of sugar, putting them at a higher risk of the disease © PA It is estimated that today’s children and teenagers are consuming three times the recommended level of sugar, putting them at a higher risk of the disease

The Government's sugar tax on soft drinks has brought in half as much money as Ministers first predicted it would generate, the first official data on the policy has shown. 

First announced by George Osborne in 2016, the levy which applies to soft drinks containing more than 5g of sugar per 100ml, was introduced to help reduce childhood obesity.

It is estimated that today’s children and teenagers are consuming three times the recommended level of sugar, putting them at a higher risk of the disease.  

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Initially the sugar tax was estimated to make £520m a year for the Treasury, however data released by HMRC yesterday tracking its first six months, showed it is on track to make less than half this amount. At present it is expected to generate £240m for the year ending in April 2019, which will go towards funding school sports. 

a screenshot of a social media post: Q&A | The sugar tax © Provided by Telegraph Media Group Limited Q&A | The sugar tax

It comes after after more than half of soft drinks sold in shops have had their sugar levels cut by manufacturers so they can avoid paying the tax.  Drinks now contain 45 million fewer kilos of sugar as a result of manufacturers’ efforts to avoid the charge, according to Treasury figures.  Exchequer Secretary to the Treasury, Robert Jenrick, said the less-than-expected level of sugar tax being paid into the Government's coffers represented a success story. 

He said: “Today’s figures show the positive impact the soft drinks levy is having by raising millions of pounds for sports facilities and healthier eating in schools, as well as encouraging manufacturers to cut sugar in over half the drinks found in UK stores. “Helping our next generation to have a healthy and active childhood is a priority for us, and I’m pleased to see the industry is playing its part.”

Since April drinks companies have been forced to pay between 18p and 24p for every litre of sugary drink they produce or import, depending on the sugar content. 

After being given two years to prepare for the change the makers of many drinks, including Iron Bru, San Pellegrino, as well as vast numbers of own brand drinks, decided to reformulate their recipies to avoid the tax. 

However some high sugar brands, like Classic Coca Cola, have accepted the change and are refusing to reformulate for fear of upsetting consumers. As such the sugar tax has adding around 50p to the ticket price of a large Coke bottle, or 8p to that of a can.  

Fruit juices, milk-based drinks and most alcoholic beverages are exempt, as are small companies manufacturing fewer than 1m litres per year.

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