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UK Guides Firms On How To Register For Soft Drinks Tax

by Jason Gorringe, Tax-News.com, London

12 April 2018


HM Revenue and Customs has released guidance on compliance obligations for those firms liable to pay the UK's new Soft Drinks Industry Levy, introduced on April 6, and for warehouses that store taxable beverages.

The tax is levied at:

  • GBP0.24 (USD0.32) per litre of drink if it contains eight grams of sugar per 100 millilitres; and
  • GBP0.18 per litre of drink if it contains between five to eight grams of sugar per 100 millilitres.

According to the guidance, there are different rules about when a taxpayer must register for the levy, depending on how and when they handle liable drinks.

A taxpayer must register within 30 days of:

  • The end of the month in which the taxpayer packaged liable drinks for someone else;
  • The date on which the taxpayer knew they were to package liable drinks for someone else in the next 30 days;
  • The end of the month in which the levy becomes due on drinks brought into the UK;
  • The date on which the taxpayer establishes that the levy will become due on drinks brought into the UK;
  • The end of the month where the taxpayer has produced over one million litres of liable drinks in the past 12 months (including any liable drinks produced before April 6, 2018); or
  • The date on which the taxpayer established that in the next 30 days they will have produced over one million litres of liable drinks in the past 12 months (including any liable drinks produced before April 6, 2018).

Those caught by more than one of these rules must register at the earliest date. Registration is required only once. There are penalties for non-compliance.

To register for the Soft Drinks Industry Levy, the taxpayer must have a Government Gateway account or create one.

Under the Soft Drinks Industry Levy regime, a premises owned or run by the taxpayer or someone else to store liable goods should be nominated as a "registered warehouse." When the taxpayer move drinks liable for the Soft Drinks Industry Levy into a registered warehouse, the drinks won't have to be reported until they are either:

  • Moved out of the registered warehouse; or
  • Made available for sale (or free of charge).

Those nominating the premises of a customer as a registered warehouse and moving liable drinks to it will be considered to be making them available to the customer, HMRC explained. This means the drinks will need to be reported for the levy at that point. The point at which a taxpayer needs to report drinks will be delayed only if they're moved to a premises after it's been nominated as a registered warehouse.

A taxpayer must get and keep records of the addresses of all premises where liable drinks were stored for each reporting period, and which premises were registered warehouses.

For each delivery of liable drinks to all premises including registered warehouses, the taxpayer must get and keep records that show:

  • The amount delivered, in litres;
  • The date of delivery;
  • The date that they were removed from the premises;
  • Details of who made the delivery; and
  • Details of who transported the drinks from the premises.

Taxpayers must keep these records for six years, starting from the last day of the Soft Drinks Industry Levy reporting period that the records are for.

Taxpayers will be able to nominate a registered warehouse from May 2018.

TAGS: compliance | tax | value added tax (VAT) | sales tax | tax compliance | United Kingdom | penalties | Tax

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