Finance (No. 2) Bill (HL Bill 156)

and “packaged” is to be construed accordingly.

73 Meaning of “prepared drink”

(1) In this Part a reference to “prepared drink” is a reference to—

(a) a soft drink within subsection (1)(a) of section 72;

(b) 5a beverage that would result from preparing a liquid within subsection
(1)(b) of that section—

(i) in a specified manner (see section 72(2)), and

(ii) in accordance with the relevant dilution ratio.

(2) The “relevant dilution ratio” means—

(a) 10the dilution ratio stated on, or calculated by reference to information
stated on, the packaging of the soft drink;

(b) where subsection (3) or (4) applies, the dilution ratio determined by the
Commissioners.

(3) This subsection applies where the packaging of the soft drink states neither the
15dilution ratio nor information by reference to which the dilution ratio can be
calculated.

(4) This subsection applies where—

(a) the dilution ratio, or information by reference to which the dilution
ratio can be calculated, is stated on the packaging of the soft drink, and

(b) 20it is reasonable to assume that the main purpose, or one of the main
purposes, of stating that particular dilution ratio or information is
avoiding or reducing liability for soft drinks industry levy.

(5) The Commissioners may by or under regulations make provision about the
criteria for—

(a) 25determining a dilution ratio for the purposes of subsection (2)(b);

(b) determining whether the main purpose, or one of the main purposes,
of stating a particular dilution ratio or information is avoiding or
reducing liability for soft drinks industry levy.

Chargeable soft drinks

74 30Meaning of “chargeable soft drink”

“Chargeable soft drink” means a packaged soft drink that—

(a) meets the sugar content condition (see section 75), and

(b) is not an exempt soft drink (see section 76).

75 Sugar content condition

(1) 35A packaged soft drink meets the sugar content condition if it contains—

(a) added sugar ingredients, and

(b) at least 5 grams of sugars (whether or not as a result of containing
added sugar ingredients) per 100 millilitres of prepared drink.

(2) A packaged soft drink contains “added sugar ingredients” if any of the
40following are combined with other ingredients at any stage in the production
of the soft drink—

(a) calorific mono-saccharides or di-saccharides;

(b) a substance containing calorific mono-saccharides or di-saccharides.

(3) But a packaged soft drink does not contain “added sugar ingredients” only by
reason of containing fruit juice, vegetable juice or milk (or any combination of
5them).

(4) The Commissioners may by regulations make provision about what is, or is
not, to be treated for the purposes of this Part as fruit juice, vegetable juice or
milk.

(5) Where regulations under subsection (4) contain a reference to an EU
10instrument or any provision of an EU instrument, the regulations may provide
that the reference is to be construed as a reference to that instrument or that
provision as amended from time to time.

76 Exempt soft drinks

(1) The following are “exempt soft drinks”—

(a) 15milk-based drinks,

(b) milk substitute drinks,

(c) alcohol substitute drinks, and

(d) soft drinks of a specified description which are for use for medicinal or
other specified purposes.

(2) 20“Milk-based drink” means a soft drink which contains at least 75 millilitres of
milk per 100 millilitres of prepared drink.

(3) “Milk substitute drink” means a soft drink which—

(a) contains at least the specified quantities of calcium, and

(b) meets such other conditions as may be specified.

(4) 25“Alcohol substitute drink” means a soft drink which—

(a) is similar to a particular kind of alcoholic beverage, and

(b) meets such other conditions as may be specified.

(5) “Alcoholic beverage” means a beverage which is of an alcoholic strength
exceeding 1.2%.

(6) 30The Commissioners may by regulations make further provision about the
criteria for determining what is, or is not, to be treated as an exempt soft drink.

(7) Where regulations made under, or for the purposes of, this section contain a
reference to an EU instrument or any provision of an EU instrument, the
regulations may provide that the reference is to be construed as a reference to
35that instrument or that provision as amended from time to time.

Charging of the soft drinks industry levy

77 Charge to soft drinks industry levy

(1) The charge to soft drinks industry levy arises on a chargeable event which
occurs on or after 6 April 2018.

(2) 40Subsection (1) is subject to section 83 (small producer exemption).

78 Chargeable events: soft drinks packaged in the UK

(1) This section applies where chargeable soft drinks are packaged by a person on
premises in the United Kingdom (the “packaging premises”).

(2) A chargeable event occurs on the removal of the chargeable soft drinks from
5the packaging premises.

(3) But—

(a) if, on removal from the packaging premises, the secondary
warehousing condition is met in relation to the chargeable soft drinks,
a chargeable event occurs at the time that the secondary warehousing
10condition ceases to be met in relation to those soft drinks (and not at the
time mentioned in subsection (2));

(b) if the chargeable soft drinks are made available for sale or free of charge
before a chargeable event in relation to the soft drinks occurs under
subsection (2) or paragraph (a), a chargeable event occurs at the time
15the soft drinks are made available (and not at the time mentioned in
subsection (2) or paragraph (a)).

(4) For the purposes of this section and section 79, the secondary warehousing
condition is met, at any time, in relation to chargeable soft drinks if the
chargeable soft drinks are, at that time—

(a) 20in storage in a compliant warehouse, or

(b) being transported—

(i) from the packaging premises to a compliant warehouse, or

(ii) between compliant warehouses,

in compliance with such conditions and requirements as may be imposed by
25regulations under section 80.

(5) References in this section and in section 79 to a “compliant warehouse” are
references to premises—

(a) that are, or are to be, used for the storage of chargeable soft drinks, and

(b) in respect of which the conditions and requirements specified in
30regulations under section 80(a) are met.

79 Chargeable events: soft drinks imported into the UK

(1) This section applies where chargeable soft drinks are imported into the United
Kingdom.

(2) A chargeable event occurs, in relation to imported chargeable soft drinks, on
35first receipt of the soft drinks by a relevant person (the “first recipient”).

(3) But subsection (2) is subject to subsections (7) to (9).

(4) The “first receipt” of imported chargeable soft drinks is the first occasion on
which the soft drinks are delivered to a place in the United Kingdom which is
a relevant person’s place of business (including where the chargeable soft
40drinks are delivered from a place outside the United Kingdom which is
another place of business of the relevant person).

(5) “Relevant person” means a person who carries on a business involving the sale
of chargeable soft drinks.

(6) The reference in subsection (5) to the sale of chargeable soft drinks includes a
45reference to—

(a) sale by wholesale,

(b) sale by retail, and

(c) sale for consumption on or in the vicinity of premises on which the
drinks are sold.

(7) 5Subsection (8) applies if, on first receipt of the imported chargeable soft drinks,
the place of business to which the soft drinks are delivered is a compliant
warehouse.

(8) Subject to subsection (9), a chargeable event occurs at the time that the
secondary warehousing condition ceases to be met in relation to the imported
10chargeable soft drinks (and not at the time mentioned in subsection (2)).

(9) If the chargeable soft drinks are made available for sale or free of charge by a
relevant person (the “first seller”) before a chargeable event in relation to the
soft drinks occurs under subsection (2) or (8), a chargeable event occurs at the
time the chargeable soft drinks are made available (and not at the time
15mentioned in subsection (2) or (8)).

80 Secondary warehousing regulations

The Commissioners may by regulations make provision, for the purposes of
sections 78 and 79—

(a) specifying conditions and requirements in respect of premises on
20which chargeable soft drinks may be stored before the occurrence of a
chargeable event (see section 78(5)(b));

(b) specifying other conditions and requirements as to the storage of
chargeable soft drinks for the purposes of the secondary warehousing
condition (see section 78(4));

(c) 25specifying conditions and requirements as to the transportation of
chargeable soft drinks for the purposes of the secondary warehousing
condition;

(d) imposing obligations on specified persons to provide information in
connection with the storage or transportation of chargeable soft drinks.

81 30Liability to pay the levy

(1) Where the charge to soft drinks industry levy arises on a chargeable event
within section 78(2) or (3), the person who packages the chargeable soft drinks
is liable to pay the amount charged.

(2) Where the charge to soft drinks industry levy arises on a chargeable event
35within section 79(2) or (8), the relevant person who is the first recipient is liable
to pay the amount charged.

(3) Where the charge to soft drinks industry levy arises on a chargeable event
within section 79(9), the relevant person who is the first seller is liable to pay
the amount charged.

82 40Levy rates

(1) Soft drinks industry levy is charged—

(a) in the case of chargeable soft drinks that meet the higher sugar
threshold, at the rate of £0.24 per litre of prepared drink;

(b) in the case of chargeable soft drinks that do not meet the higher sugar
threshold, at the rate of £0.18 per litre of prepared drink.

(2) A chargeable soft drink meets the higher sugar threshold if it contains at least
8 grams of sugars (whether or not as a result of containing added sugar
5ingredients) per 100 millilitres of prepared drink.

Exemption etc

83 Small producer exemption

(1) No charge to soft drinks industry levy arises—

(a) on a chargeable event within section 78 in relation to chargeable soft
10drinks produced by a person who is, on the relevant day, a qualifying
small producer;

(b) on a chargeable event within section 79 in relation to chargeable soft
drinks produced by a person who is, on the relevant day, a small
producer.

(2) 15Chargeable soft drinks are “produced” by a person if they are packaged (by or
on behalf of the person) for marketing under—

(a) the person’s name or business name, or

(b) another name which is used in accordance with a licence granted to the
person.

(3) 20For the purposes of this section and section 84, the “relevant day”, in relation
to chargeable soft drinks, is the day on which the charge to soft drinks industry
levy on the chargeable soft drinks would (apart from this section) arise.

(4) “Small producer” has the meaning given by section 84.

(5) A person is a “qualifying small producer” if the person is a small producer who
25is either—

(a) registered under section 91 (voluntary registration: small producers),
or

(b) ineligible for registration under that section because the person does
not meet the condition in section 91(2)(c) (voluntary registration
30eligibility conditions: packaging by a person other than the producer).

84 Meaning of “small producer”

(1) A person (“the producer”) who produces chargeable soft drinks is a “small
producer” on the relevant day if Conditions A and B are met.

(2) Condition A is met if the aggregate of—

(a) 35the amount of the producer’s chargeable soft drinks within section
72(1)(a) in respect of which a relevant event has occurred during the
relevant 12 month period, and

(b) the amount of prepared drink that would result from the producer’s
chargeable soft drinks within section 72(1)(b) in respect of which a
40relevant event has occurred during the relevant 12 month period,

does not exceed the small producer threshold.

(3) Condition B is met if there are reasonable grounds for believing that the
aggregate of—

(a) the amount of the producer’s chargeable soft drinks within section
72(1)(a) in respect of which a relevant event will occur during the
relevant 30 day period, and

(b) the amount of prepared drink that would result from the producer’s
5chargeable soft drinks within section 72(1)(b) in respect of which a
relevant event will occur during the relevant 30 day period,

will not exceed the small producer threshold.

(4) A “relevant event” occurs in respect of chargeable soft drinks on the removal
of the chargeable soft drinks from the premises on which they are packaged.

(5) 10But—

(a) if, on removal from the premises on which the chargeable soft drinks
are packaged, the secondary warehousing condition is met in relation
to the soft drinks, a “relevant event” occurs in relation to those soft
drinks at the time that the secondary warehousing condition ceases to
15be met in relation to them (and not at the time mentioned in subsection
(4));

(b) if the chargeable soft drinks are made available for sale or free of charge
before a relevant event in relation to the soft drinks occurs under
subsection (4) or paragraph (a), a “relevant event” occurs at the time
20they are made available (and not at the time mentioned in subsection
(4) or paragraph (a)).

(6) For the purposes of subsections (2) and (3)—

(a) the “relevant 12 month period” is the period of 12 months ending with
the end of the month that immediately precedes the month in which the
25relevant day falls, and

(b) the “relevant 30 day period” is the period of 30 days beginning with the
relevant day.

(7) The “small producer threshold” is 1 million litres.

(8) References in this section to “the producer’s chargeable soft drinks” are
30references to chargeable soft drinks produced by the producer or a person
connected with the producer.

85 Tax credits

(1) The Commissioners may by regulations make provision in relation to cases
where, after a charge to soft drinks industry levy has arisen in relation to
35chargeable soft drinks—

(a) the soft drinks are exported from the United Kingdom;

(b) the soft drinks are lost or destroyed.

(2) The provision that may be made is provision—

(a) for the liable person to be entitled to a tax credit in respect of any soft
40drinks industry levy charged on the soft drinks that are exported or (as
the case may be) lost or destroyed;

(b) for the tax credit to be brought into account when the person is
accounting for soft drinks industry levy due from the person for the
prescribed accounting period or periods.

(3) 45Regulations under this section may include provision—

(a) for any entitlement to a tax credit to be conditional on the making of a
claim by the liable person, and specifying the period within which and
the manner in which a claim may be made;

(b) for any entitlement to bring a tax credit into account to be conditional
5on compliance with prescribed requirements;

(c) specifying circumstances in which, and criteria for determining the
period for which, a liable person is not entitled to a tax credit;

(d) requiring a claim for a tax credit to be evidenced and quantified by
reference to prescribed records and other documents;

(e) 10requiring a person claiming any entitlement to a tax credit to keep, for
the prescribed period and in the prescribed form and manner, those
records and documents and a record of prescribed information relating
to the claim;

(f) for the withdrawal of a tax credit where any requirement of the
15regulations is not complied with;

(g) about adjustments of liability for soft drinks industry levy in
connection with entitlement or withdrawal of entitlement to a tax credit
in prescribed circumstances;

(h) about the treatment of a tax credit where the liable person ceases to
20carry on a business involving the package or sale of chargeable soft
drinks.

(4) Regulations under paragraph (a) of subsection (1) may include provision for
the sale or provision of chargeable soft drinks on passenger transport
operating between the United Kingdom and a place outside of the United
25Kingdom to be treated as “export from the United Kingdom” for the purposes
of regulations under that paragraph.

(5) Regulations under paragraph (b) of subsection (1) may include provision about
the circumstances in which chargeable soft drinks are to be treated as lost or
destroyed for the purposes of regulations under that paragraph.

(6) 30In this section—

• “liable person” means the person who is liable under section 81 to pay the
  charge to soft drinks industry levy referred to in subsection (1);

• “prescribed” means specified in, or determined in accordance with,
  regulations under this section.

35Registration

86 The register

(1) The Commissioners must establish and maintain a register for the purposes of
this Part.

(2) In this Part, “the register” means the register under subsection (1) and
40references to registration are to registration in it.

(3) The register may contain such information as the Commissioners think is
required for the purposes of the collection and management of soft drinks
industry levy.

87 Liability to register: packagers

(1) A person becomes liable to be registered—

(a) at the end of any month, if the person has packaged any chargeable soft
drinks in respect of which a chargeable event within section 78 has
5occurred during that month;

(b) on any day, if there are reasonable grounds for believing that, during
the period of 30 days beginning with that day, a chargeable event
within section 78 will occur in respect of chargeable soft drinks
packaged by the person.

(2) 10But subsection (1) does not apply to a person if—

(a) the chargeable soft drinks packaged by the person are also produced by
the person, and

(b) the person is not liable to be registered under section 88 (liability to
register: producers).

(3) 15Subsection (1) does not apply in relation to a person who is already registrable.

(4) In this section and in sections 88 and 89 references to “a person who is already
registrable” are references to a person who—

(a) is registered under this section, section 88 or section 89,

(b) is subject to a relevant notification requirement, or

(c) 20would, if the person had complied with a relevant notification
requirement, be registered under this section, section 88 or section 89.

(5) In subsection (4)(c) “relevant notification requirement” means a requirement
under section 90(1) to notify the Commissioners of a liability to register—

(a) arising on a previous occasion, and

(b) 25in respect of which the notification period has expired.

(6) In this section “notification period” has the meaning given by section 90(2).

88 Liability to register: producers

(1) A person (“the producer”) who produces chargeable soft drinks becomes liable
to be registered—

(a) 30at the end of any month, if the qualifying amount of the producer’s
chargeable soft drinks in respect of which a chargeable event within
section 78 has occurred during the immediately preceding period of 12
months exceeds the small producer threshold;

(b) on any day, if there are reasonable grounds for believing that the
35qualifying amount of the producer’s chargeable soft drinks in respect
of which a chargeable event within section 78 will occur during the
period of 30 days beginning with that day will exceed the small
producer threshold.

(2) The “qualifying amount” of chargeable soft drinks in respect of which a
40chargeable event occurs is the aggregate of—

(a) the amount of the chargeable soft drinks within section 72(1)(a) in
respect of which the chargeable event occurs, and

(b) the amount of prepared drink that would result from the chargeable
soft drinks within section 72(1)(b) in respect of which the chargeable
45event occurs.

(3) Subsection (1) does not apply in relation to a person who is already registrable.

(4) References in this section to “the producer’s chargeable soft drinks” are
references to chargeable soft drinks produced by the producer or a person
connected with the producer.

89 5Liability to register: imported chargeable soft drinks

(1) A person becomes liable to be registered—

(a) at the end of any month if, during that month, a chargeable event
within section 79 has occurred—

(i) on the first receipt, or on the making available, of chargeable
10soft drinks by the person, or

(ii) on the secondary warehousing condition ceasing to be met in
relation to chargeable soft drinks in respect of which the person
is the first recipient;

(b) on any day, if there are reasonable grounds for believing that, during
15the period of 30 days beginning with that day, a chargeable event
within section 79 will occur—

(i) on the first receipt, or on the making available, of chargeable
soft drinks by the person, or

(ii) on the secondary warehousing condition ceasing to be met in
20relation to chargeable soft drinks in respect of which the person
is the first recipient.

(2) Subsection (1) does not apply in relation to a person who is already registrable.

90 Notification of liability and registration

(1) A person who becomes liable to be registered under section 87, 88 or 89 must
25notify the Commissioners of the liability before the end of the notification
period.

(2) The “notification period” is the period of 30 days beginning with the day on
which the liability arises.

(3) Where the Commissioners are satisfied that a person is liable to be registered
30(whether or not the person has notified liability under subsection (1)), the
Commissioners must register the person with effect from the day on which the
liability to register arises.

91 Voluntary registration: small producers

(1) The Commissioners must register a person who—

(a) 35meets the voluntary registration eligibility conditions, and

(b) applies to the Commissioners for registration under this section.

(2) The voluntary registration eligibility conditions are met by a person (P) if—

(a) P produces chargeable soft drinks,

(b) P is not liable to be registered under section 88 (liability to register:
40producers), and

(c) some or all of the chargeable soft drinks produced by P are packaged
on premises in the United Kingdom by a person other than P.

(3) A person who is registered under section 87 or 89 may also be registered under
this section.

92 Cancellation of registration under section 87, 88 or 89

(1) A registration under section 87, 88 or 89 may be cancelled only in accordance
5with this section.

(2) For the purposes of this section, a person meets the “liability condition” at a
particular time if—

(a) at the end of the preceding month, the condition in section 87(1)(a),
88(1)(a) or 89(1)(a) is met in relation to the person, or

(b) 10at that time, the condition in section 87(1)(b), 88(1)(b) or 89(1)(b) is met
in relation to the person.

(3) The Commissioners must cancel a person’s registration under section 87, 88 or
89 if—

(a) the person requests the cancellation, and

(b) 15the person satisfies the Commissioners that the person does not, at the
time of the request, meet the liability condition.

(4) A cancellation under subsection (3) is to be made with effect from—

(a) the day on which the request is made, or

(b) such later day as may be agreed between the Commissioners and the
20person.

(5) The Commissioners may cancel a person’s registration under section 87, 88 or
89 if they are satisfied that the person does not meet the liability condition.

(6) A cancellation under subsection (5) is to be made with effect from—

(a) the day on which the person ceased to meet the liability condition, or

(b) 25such later day as may be agreed between the Commissioners and the
person.

(7) But the Commissioners must not cancel a registration under subsection (3) or
(5) with effect from any time unless—

(a) they are satisfied that it is not a time when the person would meet the
30liability condition, and

(b) it is reasonable to believe that the person will not become liable to be
registered under section 87(1)(a) or 89(1)(a) during the period of 12
months beginning with that time.

(8) The Commissioners may cancel a person’s registration under section 87, 88 or
3589 if they are satisfied that the person did not meet the liability condition on the
day on which the person was registered, and has not at any subsequent time
met the liability condition.

(9) A cancellation under subsection (8) is to be made with effect from the day on
which the person was registered.

93 40Cancellation of voluntary registration

(1) The Commissioners may cancel a person’s registration under section 91 if they
are satisfied that the person does not meet the voluntary registration eligibility
conditions (see subsection (2) of that section).