The tax to fund a new generation of superfast broadband connections was originally put at about 50p per month per household with a telephone landline. But a document leaked to the Conservatives show that this is just for a home with one line and before VAT is added.
The actual plan is for this tax to be levied against every phone line going into a home. Then this tax, just like the fuel tax petrol and diesel, will be taxed by the addition of VAT. This will hit businesses hard too as most have multiple telephone lines.In the eyes of most this is a regressive tax, in that it takes a higher percentage from low earners than from high earner, which should not be imposed.
The government claim that this money will enable superfast broadband into hard to reach areas that may otherwise be ignored by providers.
The Tories have already said that, if elected, they will scrap these plans, which are to be announced in the Finance Bill early in the New Year. The CBI is also worried about how the cost will impact businesses.
The cost of Â£1 to Â£2 a month for a few ‘phone lines may not sound much to most, but for some it will be significant. For businesses that rely on telephones for marketing and customer contact this will be quite a sting.
Also, all that the customer will see is a sudden hike in their bills, the tax will not be separately itemised on the statements. Just like when people buy fuel for the car and direct their anger at the supplier for every rise in prices.
This tax was part of Lord Carter’s ‘Digital Britain’ report and Stephen Timms had already said that it would be law before the next election when he was speaking at a Chartered Institute for IT debate in September.
Maybe we can hope that it will cut down on the number of cold calls we get from telemarketers though.