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UK Govt Drops Broadband Tax

by Jason Gorringe, Tax-News.com, London

09 April 2010


The Labour government has abandoned its plans to introduce a GBP6 landline tax to fund improvements in UK broadband infrastructure. The levy was dropped to secure passage of the Digital Britain Bill before parliament is dissolved next Monday.

With Gordon Brown’s announcement of an election date, May 6, the Bill became a political football between the two major political parties when it was subject to its second reading in the House of Commons on April 6.

Financial Secretary to the Treasury Stephen Timms clashed with Conservative MPs in the Commons over the tax, with the Tories arguing that proposals to introduce ‘superfast’ broadband in the UK should instead be funded from TV license fees. The tax would have equated to GBP0.50 on monthly bills for homes with a landline, but has now been pared from the legislation.

The Bill, which still contains controversial anti-piracy provisions, received a majority vote in the Commons on April 7, and is expected to receive Royal Assent before Parliament is dissolved on April 12.

The new anti-piracy provisions will allow the Regulator to reduce the bandwidth or suspend the internet accounts of users that illegally share copyright-protected material, in particular digital music.

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