Tories Will Reverse UK Broadband Tax

by Robert Lee, Tax-News.com, London

21 October 2009

The UK Conservative Party plans to scrap a proposed tax on landline telephone bills, revenues from which will be used to fund an upgrade of the country's broadband infrastructure, if it should win the 2010 election.

Shadow culture secretary Jeremy Hunt told the Financial Times in an article published on October 19 that the proposed 50p per month tax on all landlines would be scrapped "as soon as possible" after the next general election, expected in the spring or early summer of next year, and assuming the Conservatives are returned to power.

The broadband tax was announced by the Labour government last month to fund recommendations in the "Digital Britain" report, published in July.

According to Treasury Minister Stephen Timms, who is in charge of implementing the Digital Britain project, the tax will equate to an annual charge of GBP6 on each home with a phone line, regardless of whether the line is operational, which he expects will raise between GBP150m and GBP175m.

The report’s most costly recommendation was the development of a super-fast nationwide broadband network, a project that Timms believes will be realized for 90% of the country in just seven years.

The tax will likely feature in the forthcoming Digital Economy Bill, which is due before parliament in November, and providing it gains approval it will enter into force from January 1, 2010, or in the early part of the year.

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