Coalition confirms broadband tax is a non-starter

Following plans by the former Labour government to introduce a new broadband tax that would apply to landlines the new coalition government has now confirmed that it will not be bringing this tax in and that the broadband tax plan is a non-starter.

The coalition government has today confirmed that the broadband tax that was originally planned by the former Labour government is now dead in the water and will not be going ahead. The broadband tax was proposed by the Labour government before it went out of power, and involved charging fifty pence a month on landlines, the proceeds of which were to be used to fund high speed broadband rollout in the UK.

Whilst the new coalition government is still planning to rollout broadband across the UK, including focussing on rural areas where adequate broadband is not available, the onus will now fall on the private sector to provide the necessary funding for this project. The news will have been welcomed by consumers who did not want to pay the additional tax to pay for the rollout of broadband, but will pile more pressure on the private broadband sector.

When it was first proposed the broadband tax was seen as a stealth tax by many people, and the idea caused a lot of controversy. The scrapping of the tax was confirmed by the new Chancellor of the Exchequer, George Osborne, in his emergency budget, which took place today. Osborne stated: “We need investment in our digital infrastructure. But the previous government’s landline duty is an archaic way of achieving this, hitting 30 million households who happen to have a fixed telephone line. I am happy to be able to abolish this new duty before it is even introduced.”

Source – Financial Advice