by Nick Robinson | Oct 22, 2015 | Accounting, Taxation
It’s National Chocolate Week here in the UK (hooray!), a themed week that celebrates the nation’s favourite sweet treat in all its gluttonous, glutinous glory. This is the eleventh stupendous year of cuddling up with cocoa, and the big Chocolate Show in London is the culmination of our love for this confection.
But whilst we love chocolate for its taste and how it makes us feel (chocolate releases serotonin and dopamine, the feel good hormones), there are issues with it. Thanks to how great it is, some people can become addicted (it’s partly to do with those hormones we mentioned earlier), and it’s not great for our health.
That’s why the government has suggested (and it is only a suggestion) that chocolate, along with other types of ‘junk food’ should be subject to a so called ‘fat tax’ of up to 20 percent.
Now, here at Yorkshire Accountancy we know about tax. It’s just one of the services that we offer, so when we heard about this ‘fat tax’ we were intrigued. Is this something that could really work? What would it do? How would it affect sales and production? And who would it affect when it comes down to it?
The thinking behind adding a tax to confectionery and junk food, and basically anything with plenty of fat, sugar, grease, or anything else that is bad for a human being, is to combat the spiralling levels of obesity, heart disease, diabetes, and other weight related diseases and conditions. Researchers at both Oxford University and the Centre for Food Policy at City University in London has concluded from their studies that a 20 percent tax would – could – mean up to 20 percent fewer people buying chocolate. This would – could – lead to a 4 percent drop in obesity rates.
All from a bit of extra tax.
But what’s more interesting is the food industry’s issue with the idea of a fat tax. They argue that the addition of a tax like this would be ineffective and unfair, and that ultimately it would damage the industry irreparably and lead to many job losses and potentially a number of established businesses going bankrupt and finally calling in the administrators.
All from a bit of extra tax…
So what might happen? Would those who love chocolate enough for it to cause an impact on their health actually stop buying it because of a tax induced price increase? If, as experts say, a great love of chocolate is an addiction, would a tax really stop people from buying it? Or, would the problem go even deeper – literally deeper, as in underground – and could a black market for sweets and crisps and so on be established?
It’s difficult to determine exactly what the outcome will be, if such a tax is ever granted. Countries such as Denmark, Hungary, and France all have a junk food tax, and it seems to be working there… but don’t these countries have different eating habits than us here in the UK? Aren’t they traditionally meant to be more healthy anyway?
So, there are two schools of thought on the ‘fat tax’. The first is that it is an excellent idea, that it will save people’s lives and that it will make us a healthier, happier nation all round. The second is that it is the worst idea anyone has ever come up with, and will push chocolate into becoming something like a drug, sold on the streets by kids in hoodies, and simultaneously crippling the confectionery industry.
But with one in 10 children who started school this September weighing in as obese, and with just under 10 percent of the UK population contracting diabetes through weight related problems, is a fat tax the only option left open to us?
Let us know what you think!
And if you have any questions about tax (chocolate related or otherwise), please do get in touch with us.