UK Govt Announces Broadband Tax From 2010

by Amanda Banks, Tax-News.com, London

25 September 2009

The government is to introduce a controversial broadband tax ahead of the election to fund recommendations in the "Digital Britain" report, published in July.

The announcement was made by Treasury Minister Stephen Timms, who is in charge of implementing the Digital Britain project, during a debate organized by the BCS (British Computer Society) Chartered Institute for IT.

According to Timms, 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 – a modest sum given the magnitude of the task ahead.

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. Many experts, however, have noted that the GBP1bn which will be generated over the period will cover very little of the network’s end cost.

"We want to make high speed networks nationally available. The next-generation fund will help that and we will legislate for it this side of a general election," Timms said.

According to Timms, 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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