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Sugar tax on soft drink companies announced

Soft drinks companies will be taxed if they produce drinks with too much sugar in them, George Osborne has revealed.

In a surprise announcement during the 2016 Budget today, the chancellor said that the tax would be introduced in two years' time, so that companies have time to change their recipes accordingly.

The money from the tax - which is estimated to be £520 million - will go towards funding sports in primary and secondary schools.

In response, Janet Davies, chief executive of the Royal College of Nursing (RCN), said that the tax is “a good step towards prevention”.

“Drinks manufacturers must now act responsibly to reduce sugar levels and give clear information to consumers, and more detail is needed to show how the levy will work in encouraging them to make healthy choices,” she added.

The amount that companies are taxed will depend on the amount of sugar in their drinks and how many drinks they produce or import. Pure fruit juices and milk-based drinks will be excluded.

There will be two bands of tax, Osborne announced - one for total sugar content above 5g per 100ml. A second band is for the most sugary drinks, with more than 8g per 100ml.

Gavin Partington, director general of the British Soft Drinks Association said: “We are extremely disappointed by the government's decision to hit the only category in the food and drink sector which has consistently reduced sugar intake in recent years - down 13.6% since 2012...

“By contrast sugar and calorie intake from all other major take home food categories is increasing - which makes the targeting of soft drinks simply absurd.”

The government will now consult on the implementation of the tax.