Sugar-filled soft drinks will see a tax hike in April 2018 in an attempt to combat rising levels of obesity.
Philip Hammond announced details of the new sugar tax in his budget statement, saying the money raised would go to the Department for Education (DfE) for school sports.
Tax on drinks with more than five grams of sugar per 100ml will be levied by 18p per litre, while those with eight grams or more of sugar per 100ml will have an extra tax of 24p per litre.
This could bring significant health benefits, cutting rates of tooth decay, obesity and type 2 diabetes, although soft drinks manufacturers say there is no evidence this will be the case.
The government has plans to double the value of the primary PE and sports premium to £320 million from September by using some of the funds from the new tax.
The levy, which the government has said will raise £520 million, will also pay for an extended school day at 25 per cent of secondary schools in the most disadvantaged areas of England, and fund the expansion of healthy breakfast clubs.