The Sugar Tax Is Going to Cost Us All a Lot of Money

28/06/2016 16:15 | Updated 28 June 2016

We know what the inflationary impact of the UK sugar tax is. It is a massive £1 billion of additional national debt interest.

We know this because the Guardian newspaper let this slip in one of their sub-headings a few weeks after the sugar tax was announced. People against Sugar Tax wrote to the Office for Budget Responsibility, and they confirmed this was the case. We were genuinely shocked at this astronomical figure.

It's important to point out that we will all be paying for the sugar tax, either directly or indirectly. Every single one of us. Health campaigners may dance in celebration at this unwanted nanny-state intervention, but they will be contributing to it too.

What we don't know, and what the Treasury don't want us to know, is what the administrative and legal costs of the sugar tax are. Why are they being so shy with publishing these costs?

Well today, People against Sugar Tax have published some research which shows that the enforcement costs of the sugar tax will be at least £2 million a year.

We calculate that an additional 51 enforcement officers will be needed to be recruited across the country just because of the sugar tax. And for anyone who thinks that existing Trading Standards Officers can do the job, think again. Trading Standards Officer numbers have been cut significantly in the last few years.

If each of these officers earns a starting salary of £30,000 each, then that alone is just over £1.5 million. Yes it is just £1.5 million, but would you rather save £1.5 million or spend £1.5 million?

Then you would need a manager to oversee the work of the enforcement officers, who would probably be on £50,000. We didn't factor into our calculations the possibility of four or five regional managers, but that would be an extra £200,000-£250,000.

There would need to be at least four administration staff (maybe even more in the first few weeks), and if each of them earn £25,000, then that is another £100,000. You would then need a supervisor for the administration staff, who would probably be earning £35,000.

We haven't been able to work out the costs of the initial training and recruitment to get things up and running, so we have gone for a conservative estimate of just £10,000 for the initial training and recruitment costs. It is likely that it would be closer to £100,000 however.

We calculate the ongoing training and recruitment of new staff will be more than £90,750 a year, and we estimate the cost of writing to businesses just once a year will be £174,865.

If perhaps just 10% of these businesses were in arrears with sugar tax payments, or were late in registering with the Treasury, a reminder letter to those 10% would be a further £17,486.

But that is just the enforcement costs. The sugar tax announcement was in March, and so the Treasury would have already spent significant sums on legal fees, and diverting Treasury staff from other more important tasks.

What about the media and PR activity costs in 2018 to help ensure that businesses are aware? Presumably there will be a website, newspaper adverts, TV adverts, radio adverts, direct mailings, and all the rest of it. That will run into the hundreds of thousands of pounds at a minimum.

And then there are the legal fees. How much taxpayers money has been spent on legal advice on the sugar tax? Perhaps the Treasury could let us know.