The new ‘broadband tax’ will be applied to each phone line rather than per person, leaving nearly two million households paying up three times the £6 announced by the government, according to a new report. A document, leaked to the Conservatives and reported in The Times, shows the Treasury stands to gain a further £30 million annual windfall by applying VAT to create a tax upon a tax. Plans by Revenue & Customs show that ministers will apply the tax to each phone line rather than per customer — affecting more than 1.7 million homes with more than one phone line — and will also add VAT to the cost.
The levy, billed as ‘50p a month’ when it was announced in June, has also widened to include high-speed fibre-optic connections in addition to standard copper lines.
A household with one line for phone calls and another for internet or fax use would pay 50p a month on each line plus VAT, a total of £14.10. Users with three lines, many of whom work from home, would pay £21.15.
Ministers hope the levy will raise up to £175 million a year to fund fast connections for rural areas that currently suffer from sluggish or non-existent broadband access.
A government spokesman told the Times: “We do not comment on the contents of leaked documents. It is vital for jobs and growth that Britain has a world-class digital infrastructure. Next-generation broadband brings a range of innovative services and applications with wide business, health and social benefits.
“We want everyone to experience the opportunities that next-generation broadband offers, which is why we plan to introduce a 50p levy on all fixed lines to help the market to access homes and businesses in hard-to-reach areas.”