Soft Drinks Industry Levy Calculator
The SDIL applies to producers and importers of packaged soft drinks with added sugar. Rates increased in October 2023: lower band (5–8g/100ml) = 24p/litre; higher band (8g+/100ml) = 33p/litre.
Frequently Asked Questions
What is the Soft Drinks Industry Levy (SDIL)?
The SDIL, commonly called the 'sugar tax', is a levy on producers and importers of packaged soft drinks with added sugar content. Introduced in April 2018, it applies at two rates based on sugar content per 100ml.
What are the SDIL rates in 2026?
From October 2023: lower band (5g–8g total sugar per 100ml) = 24p per litre; higher band (over 8g per 100ml) = 33p per litre. These increased from the original 18p/24p rates introduced in 2018.
Which drinks are exempt from SDIL?
Exempt drinks include: pure fruit juices and vegetable juices (no added sugar), milk-based drinks (50%+ milk content), alcohol drinks, drinks with under 5g total sugar per 100ml, and drinks containing 75%+ alcohol.
Who pays the Soft Drinks Industry Levy?
The levy is paid by UK producers and importers — not retailers or consumers directly. However, producers typically pass the cost on to customers through higher prices.
What is the small producer exemption?
Businesses producing fewer than 1 million litres of liable drinks per year are exempt from SDIL. Once they exceed 1 million litres, the levy applies to all production, not just the excess.
How is SDIL reported to HMRC?
Registered producers submit quarterly SDIL returns to HMRC. Registration is required if you produce or import more than 1 million litres per year. Smaller producers can voluntarily register.
Has the sugar tax worked?
Evidence suggests SDIL has been effective: Coca-Cola, Lucozade, Ribena and others reformulated products to avoid the levy. UK sugar content in soft drinks fell significantly after 2018. Studies show reduced obesity rates in some demographics.
Does SDIL apply to diet/zero-sugar drinks?
No. Drinks with zero or minimal added sugar (under 5g per 100ml) are not subject to SDIL. This includes all diet, zero, and light variants.
Is SDIL deductible as a business expense?
Yes. SDIL paid by producers is a deductible cost for Corporation Tax purposes, reducing the CT liability on profits.
Does SDIL apply to homemade drinks?
No. SDIL applies to packaged drinks — those sold in sealed containers. Drinks made freshly on premises (like restaurant slushies made from syrup) may be exempt, but packaged pre-mixed drinks are liable.
What happens if SDIL is not paid?
Failure to register, submit returns, or pay SDIL results in surcharges, interest, and HMRC civil penalties. HMRC has authority to estimate liability if returns are not submitted.
What is the revenue from SDIL used for?
SDIL revenue (approximately £350–£500 million per year) is hypothecated to fund school sports, breakfast clubs, and public health programmes. It was one of the first 'hypothecated' taxes in modern UK fiscal policy.