Broadband fund becomes liable to VAT
Monday November 30, 2009
The UK government’s plan to impose a 50p tax on all fixed phone lines will be subject to VAT, it has emerged.
Leaked documents reported in The Times newspaper show that the government’s Next Generation Fund, which will finance the rollout of next generation broadband services around the UK, will now cost 58.75p per line when VAT is increased to 17.5 per cent.
The typical household with one line for phone calls and another for internet or fax use would pay a total of £14.10 a month, while those with three lines could see their bills pushed up to £21.15.
The Confederation of British Industry called on the government to clarify exactly how the charges will apply to individual businesses with multiple lines.
A government spokesperson did not comment on the contents of the leaked documents but said: "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."
Ministers hope the fund will raise £175 million a year to pay for high-speed internet connections in rural areas.