The 50p landline tax

[Dave]

Been known about for a while now but details have now come out.

 

http://www.ispreview.co.uk/story/2009/12/11/consultation-details-uk-50p-phone-line-broadband-tax-plans.html

The UK HM Treasury has finally opened a consultation to examine implementation of its new £0.50p +vat per month Landline Duty / tax (Next Generation Fund) on all fixed phone lines, which is designed to help finance the roll-out of Next Generation Access to 90% of Britain by 2017 (raising an estimated £175m per year).

 

It's interesting to examine the scope of what has been proposed, which between 3.3 and 3.7 attempts to answer that most bitter of all questions: whose line will it affect. Those hoping to see exemptions won't find many, although low-cost lines that are used to provide a social telephony service (i.e. BT basic, taken by 850,000 households) will be excluded.

 

    Scope of the Landline Duty

 

    3.3 The duty is payable on local loops. These are lines that connect an end-user’s premises to the wider communications network.

 

    3.4 The duty will be payable on all local loops that are made available for use by an owner whether or not the lines are actually used. It will also be payable on all local loops regardless of whether the loop consists of a copper pair, a co-axial cable or a fibre connection.

 

    3.5 The duty will apply regardless of the service that is being provided over the local loop. Services may include traditional voice services or other data services namely broadband – Government does not intend to capture television services.

 

    3.6 Where more than one local loop is provided in order for an end-user to receive two distinct services, the duty is payable on both lines. When an end-user receives services from two different providers but over the same local loop, the duty is only payable once.

 

    3.7 There are some difficulties with this general approach due to how some retailers provide services to their customers. Virgin Media provide broadband services over a co-axial cable but standard voice services over a separate copper line where other providers would just use a single copper line for both voice and broadband services. BT will also face similar issues where fibre is overlaid on copper wires. Government’s intention is to ensure that there is no double liability under these circumstances.

 

The consultation also confirms that VAT is to be tacked on:

Billing and invoices

 

4.6 We expect that the duty will be passed down the supply chain by the line owners and subsequently by retailers to customers. There will be no requirement on owners or retailers to show the duty separately on their billing to end users. This is to prevent costly systems changes for line owners that might arise from having to account for the tax on individual invoices. If line owners recoup the duty from individual users, whether through a separate item on the bill or by including it in line rental charges, this is further consideration for the service being supplied and is therefore subject to the standard rate of VAT.

 

...

 

Key Assumptions/Sensitivities/Risks Tax revenues are treated as a transfer and therefore do not score as either a cost or a benefit – the tax is estimated to raise around £175m per year of which around £150m is raised from the duty and £25m is raised from VAT on the duty. One-off costs are assumed to be split equally between 2009 and 2010.

 

Responses to the consultation should be sent to HM Treasury by 12th February 2010, when the consultation closes. The consultation itself can be DOWNLOADED HERE (.PDF format).

 

Farcical.

[Gash]

Necessary.

[Dave]

Necessary.

 

NGA is arguably necessary but any money raised by this will simply disappear. And we'll be paying it forever.

[Dave]

Oh, and they should sort out current fucking generation broadband before worrying about the next.

 

[/obvious]

[Gash]

True, but i think it needs to start somewhere and if this money goes back into the system (which tbh i agree with you it probably wont continue to) it will be a good thing!

[Decky]

This is probably just another bullshit tax that will just go towards fitting the bill of the recession.

[GM]

decky

 

All taxes are bullshit.

[2sheds]

The whole point of privatising BT was to avoid mandatory taxes like this. The idea was that as a PRIVATE company they would not be back to pester taxpayers for any additional investment they would fund this themselves.

 

Another spectacular balls up

[Mowen]

This is probably just another bullshit tax that will just go towards fitting the bill of the recession.

 

£175m won't go very far.

[Decky]

This is probably just another bullshit tax that will just go towards fitting the bill of the recession.

 

£175m won't go very far.

 

It will when added up with all the other new taxes that will soon come in. 1 penny at a time.

[cp40]

This is probably just another bullshit tax that will just go towards fitting the bill of the recession.

 

£175m won't go very far.

 

 

it would buy the toon and pay off the overdraft.