In this section: Every tax
Soft Drinks Industry Levy
Last updated . Figures refresh every night. How each figure is worked out.
A charge on producers of sugary soft drinks, set at two levels depending on sugar content, designed to make them reformulate rather than to raise money. Producers and importers. Most absorbed it or reformulated rather than passing it on, so many drinkers never paid it. It raised £354m in 2025–26, which is 0.0% of everything HMRC collects and 0.01% of the economy. That is up £27m (8.3%) on the year before.
Figures for the 2025–26 financial year. Source: HM Revenue and Customs.
Key figures
- £354mRaised in 2025–26 up on a year earlier: +£27m (+8.3%) vs 2024–25
- 0.01%Of the whole economy (GDP) unchanged on a year earlier: no change vs 2024–25
- -17.9%In real terms, against the 2019–20 peak Adjusted for inflation with the GDP deflator
Sources: HM Revenue and Customs, HM Treasury.
What is the short version?
- How big: £354m in 2025–26, 0.0% of everything HMRC collects; after inflation, 12% more than in 2018–19.
- Latest change, 2018: Receipts come in far below the original forecast, which the government presents as the policy succeeding rather than failing.
- Where it goes: School sport and breakfast clubs, originally, like almost every tax: it is not earmarked.
- The argument: It demonstrably cut the sugar content of drinks on sale; against that, it singles out one product while confectionery and cakes are untouched.
How much does it raise?
The numbers behind this chart
| Financial year | Cash | Real, 2025-26 prices |
|---|---|---|
2018–19Details for 2018–19 | £240m | £315m |
| ||
2019–20Details for 2019–20 | £337m | £431m |
| ||
2020–21Details for 2020–21 | £299m | £364m |
| ||
2021–22Details for 2021–22 | £334m | £405m |
| ||
2022–23Details for 2022–23 | £355m | £402m |
| ||
2023–24Details for 2023–24 | £338m | £364m |
| ||
2024–25Details for 2024–25 | £327m | £338m |
| ||
2025–26Details for 2025–26 | £354m | £354m |
| ||
Figures for the 2025–26 financial year. Source: HM Revenue and Customs, HM Treasury.
How "real terms" is worked out
Real terms use HM Treasury's GDP deflator, rebased to 2025-26 prices. That is the measure the Treasury and the OBR use for public finances; the consumer price index is the right one for a shopping basket, not for the size of the state.
How does it work?
Everyone calls it the sugar tax. It is charged on the producer, not at the till, and only on soft drinks above a sugar threshold, with a higher rate above a second threshold.
Milk-based drinks, pure fruit juice and drinks below the lower threshold are outside it.
The design was unusual and deliberate: it was announced two years before it took effect, giving manufacturers time to reformulate. Most did. Reformulation, not revenue, was the point.
How has it changed?
How it got here, and why each change was made:
- 2016Announced, with a two-year delay before it applies, explicitly so producers can change their recipes.
- 2018Takes effect. Many major brands have already cut sugar below the threshold.
- 2018Receipts come in far below the original forecast, which the government presents as the policy succeeding rather than failing.
Where does the money go?
School sport and breakfast clubs, originally. When announced, the levy was presented as funding school sport, breakfast clubs and healthy-pupil programmes in England. In practice it went into the Consolidated Fund like everything else and the school programmes were funded from general spending. The link was political framing rather than an accounting rule.
Because it is not earmarked, the only honest way to show what it pays for is by proportion. If soft drinks industry levy receipts of £354m were spent in the same proportions as all public spending in 2025-26, they would break down like this. It is an illustration of scale, not a statement about where those particular pounds went.
See for every £100 of tax for the full picture.
Does it change what people do?
The best-evidenced behavioural tax in the UK. Studies found a large fall in the sugar content of soft drinks on sale, and a measurable fall in sugar bought from soft drinks per household, without a fall in soft drink volumes. Announcing it in advance and taxing the producer rather than the shopper is widely credited for that, and it is now cited internationally as a model.
When a tax rise stops raising money looks at the cases where the effect has been large enough to move the revenue.
What are the arguments?
The case for it
- It demonstrably cut the sugar content of drinks on sale.
- Taxing producers with notice prompted reformulation rather than just higher prices.
- Sugar consumption imposes costs on the NHS.
- It achieved its aim while raising less money, which is the right way round for a health tax.
The case against
- It singles out one product while confectionery and cakes are untouched.
- Some reformulation substituted sweeteners whose long-term effects are debated.
- It is regressive in so far as it is passed on.
- The earmark to school sport turned out not to be real.
Both columns are set out as their strongest case, not as a preferred answer and a strawman. See how this site handles contested questions.
Common questions
- What is the sugar tax and did it work?
- A charge on producers of sugary soft drinks, set at two levels depending on sugar content, designed to make them reformulate rather than to raise money. Producers and importers. Most absorbed it or reformulated rather than passing it on, so many drinkers never paid it.
- How much does soft drinks industry levy raise?
- £354m in 2025–26, which is 0.0% of everything HMRC collects.
- Where does soft drinks industry levy go?
- School sport and breakfast clubs, originally. When announced, the levy was presented as funding school sport, breakfast clubs and healthy-pupil programmes in England. In practice it went into the Consolidated Fund like everything else and the school programmes were funded from general spending. The link was political framing rather than an accounting rule.
Use this data
The figures belong to the bodies that published them and are used under their terms, listed in Sources for this page; most are Crown copyright under the Open Government Licence. Only our own words, analysis, charts and derived calculations are ours, published under CC BY 4.0: reuse them, including commercially, if you credit Tekstak Ltd and link back to this page.
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- Soft Drinks Industry Levy receipts by financial year (CSV) JSON HM Revenue and Customs: Open Government Licence v3.0
- Total HMRC receipts by financial year (CSV) JSON HM Revenue and Customs: Open Government Licence v3.0
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Sources for this page
| Source | Publisher | Figures as of | Updated | Licence |
|---|---|---|---|---|
| HMRC tax receipts and National Insurance contributions for the UK | HM Revenue and Customs | the 2025–26 financial year | annual | Open Government Licence v3.0 |
| GDP deflators at market prices, and money GDP | HM Treasury | the 2025–26 financial year | annual | Open Government Licence v3.0 |
Each source's figures are used under the licence shown. Our own words, analysis, charts and derived calculations are ours, under CC BY 4.0.