Posted on December 15th, 2009 by Barry Collins

Is the Government trying to hide the broadband tax?

Bills We hear a lot about so-called “stealth taxes”, but it really does seem the Government is awfully keen to keep the broadband tax hidden from view.

The Government’s Consultation Paper on the 50p per month Landline Levy (to give its proper name) states:

“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.”

The Government says this is designed to “prevent costly systems changes for line owners”. But there’s another reason why the Government might be none too keen for BT and its ilk to reveal exactly where your money’s going.

“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.”

Yes folks, we’re being taxed on a tax. That’s really quite special.

Click here to find out why you could pay more broadband tax than the likes of BT

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20 Responses to “ Is the Government trying to hide the broadband tax? ”

Chris Says:
December 15th, 2009 at 5:36 pm
Well VAT is already levied on excise duty for petrol, alcohol and tobacco, so nothing new there. Just depressing that this tax appears to be redundant, considering that it will raise only a 50th of the revenue required by BT. (£170m a year vs £5bn total estimated cost of rolling out fibre). Also I wonder if like petrol duties which are not actually spent maintaining the roads, whether any of this money raised will ever be used for the purpose intended. More likely that it will go to pay off the rapidly escalating national debt.
Bioreit Says:
December 16th, 2009 at 7:11 am
@ Chris

“Just depressing that this tax appears to be redundant, considering that it will raise only a 50th of the revenue required by BT. (£170m a year vs £5bn total estimated cost of rolling out fibre)”

Well, the reason for the difference in the two values – £1bn vs. £5bn – is because this broadband tax isn’t supposed to totally fund BT’s roll-out of fibre across the nation. It’s to bring the ‘Final Third’ of the population up to speed once BT and other telcos have done their infrastructure investments on all the large urban population centres and, as always, leave the mostly rural last 33% with nothing. This will be through all and any means of technology, be it fibre, WiMax, 3G, Satellite broadband, etc.

Therefore, to say that this sum of money will not come anywhere close to paying for a nationwide roll-out of fibre is missing the point – it is not and never has been intended for this use.

Once, PC Pro reported this in one of their first articles on the broadband tax, but not since then, so I’m not surprised that this bit of information has slipped you by.

Here’s that article:

http://www.pcpro.co.uk/news/256492/government-announces-broadband-tax

and the quote from it:

“a supplement in the region of 50p a month on fixed lines which would raise money for a ‘Final Third’ fund that would be used to secure roll out to the final third of the UK population” by 2017.”

The amount of misinformation from PC Pro surrounding this issue would be amusing if I didn’t believe it was more sinister. I’m almost expecting to start seeing “PC Pro – proudly sponsored by the Conservative Party” appearing any day now….
Chris Says:
December 16th, 2009 at 3:23 pm
From http://en.wikipedia.org/wiki/Fisking

Software engineering writer Joel Spolsky has commented that it is the same as the “line-by-line nitpick” reply style common on Usenet and not a new phenomenon, also writing “It’s fun for the nitpicker but never worth reading.”
Steve Says:
December 17th, 2009 at 7:37 am
HoHoHo.

Another tax in the UK. We are much luckier. In late 2008 the US government actually abandoned a TEMPORARY luxury tax on telephone access. It was implemented a while back (1895 aparently) to pay for Spanish American War. THey probably reinstate it next year for another 5000 years to pay for Iraq and Afghanistan.

We do still pay a charge to the town and state for Satellite TV. They must own the electromagnetic transmission rights to the air and we also pay a charge to the town to pay for the ground that the town ‘owns’ that is used by Power poles and telephone poles. Its so amusing the way governments keeps nickel and diming us and someone votes the same people in year after year.

One day we will wake up and let them know ‘WE ARE NOT AMUSED’
Dave B Says:
December 17th, 2009 at 8:59 am
Having worked in BT Billing there are two ways in which this could be applied. One is a straight increase in line rental of 50p per month or a new product code costing 50p per month. Both are simple changes and both could include the description of the charge.
Bioreit Says:
December 17th, 2009 at 11:43 am
@ Chris
#
“Software engineering writer Joel Spolsky has commented that it is the same as the “line-by-line nitpick” reply style common on Usenet and not a new phenomenon, also writing “It’s fun for the nitpicker but never worth reading.””

Ah, so rather than actually respond to my response to yours, you just insult me and effectively ignore me.

Well, can’t say I didn’t try to posit the facts to someone who blithely reads and believes PC Pro despite their clear and demonstrable inability to tell the truth.

But hey, you carry on in your existence – not only are you happy being ignoarnt, you’re actively pursuing it as a personal policy!
Bioreit Says:
December 17th, 2009 at 1:16 pm
Should make it clear that I’m only referring to PC Pro’s lack of truth-telling on this particular issue! I don’t mean to imply that this applies to all of PC Pro’s reporting!
Barry Collins Says:
December 17th, 2009 at 1:29 pm
Bioret,

The Broadband Staekholder Group estimated that it would cost £5bn to bring FTTC to the entire nation. However, it also stated: “The costs of deploying in more sparsely populated areas will be significantly higher, making the commercial deployment to the last third of UK households much more difficult.”

Experts we’ve spoken to suggest laying fibre in the final third will cost two-thirds of the overall bill. In other words, it would cost at least £3bn to fibre the last part of the country. And even then, the Government is only aiming to reach 90% of the population by 2017.

The broadband tax, by the Government’s own admission, simply won’t raise that much money.

Barry Collins
Online Editor
Derek Says:
December 17th, 2009 at 2:06 pm
What about cable then. I do not have a BT line in my house
David Gunn Says:
December 17th, 2009 at 8:48 pm
Why not use existing TV transmitters to alleviate bottlenecks in Telephone system? It would only cost £20 to feed my TV aerial signal into my PC. I’ll carry my first HDMI 1920*1080 monitor between TV and PC anyway.
Bioreit Says:
December 17th, 2009 at 9:51 pm
Barry,

Thank you for replying.

I do take those comments from the Broadband Stakeholder Group on board, however, their use of the figures and the situation is, I’m afraid to say, erroneous.

Yes, I don’t doubt that stringing fibre cables to cabinets in rural areas would prove extremely costly – and it would almost certainly cost more to bring fibre to fewer rural homes than urban ones.

But (and this is a rather large but), the government’s plans for this Final Third was never stated to be purely about bringing FTTC to every single cabinet in the country, regardless of population density. I believe the government is aware of the relative unfeasibility of trying to achieve this, which is why they explicitly mentioned in their Digital Britain report that many different technologies would be used in bringin rural areas “into the fold”, so to speak, be it 3G, WiMax, Satellite broadband, or, if possible, fibre.

So yes, even with the extra revenue generated by the broadband levy, it would be much more expensive to bring FTTC to every corner of Britain. But that is not something that the government has ever asserted it would do. Therefore, to write off the broadband levy by using such an argument is a complete mistake.

I object to the manner of reporting on this issue and the ill-judged comments by industry representatives, who would know full well what the government plans were – after all, the report is widely and readily available via many sources.

This is not just about fibre (which I personally believe we do need and not just to the green street boxes, but right up to each property), but about improving acess and minimum speeds – whether through fibre or other technologies.
Richard Says:
December 19th, 2009 at 3:21 pm
Few can doubt that the bankrupt lot now comprising the government need every bit of our cash. The original article served to remind us what a money grubbing dishonest shower they are. I for one have very serious doubts that ANY of the money will EVER do anything to bring broadband to a wider circle of users. It was a less than satisfying bit of news to learn that the 50 pence theft, not sorry ‘tax’ is actually nearer to 60 pence and that the magic difference will only go to fund second homes for the unworthy or some such similar ‘un-valuable’ scheme.
Nigel Smith Says:
December 19th, 2009 at 5:25 pm
Come on, it may start out at only a 50p tax, but we all know it will increase rapidly once in place.
Mike Says:
December 20th, 2009 at 5:22 pm
I’m fine with paying for what I get… the biggest problem I have is paying for the sh!t quality of service I’ve been getting in the UK for the last 5-10 years… in most areas of the service industry…

I’ll be happy to pay… if quality can be raised. Whether it be Gatwick airport, London Transport, or my local council… I.. I mean “we”… seem to be paying more for the same sh!t!
Online Tax Preparation Says:
January 6th, 2010 at 9:32 am
I live in a city but I think that providing broadband access to rural areas at taxpayer expense is necessary if there are no private entities willing to provide affordable access to rural residents.
Online Tax Preparation
dave Says:
March 18th, 2010 at 4:52 pm
We believe that the government should consider a reduction, or even a temporary removal, of business rates on fibre optic cable
seo company
Peter Says:
March 24th, 2010 at 10:06 pm
@dave

Its Hard to remove it for only temporary time.. You know that the government take a lot of time to decide what to make.. cheers 24h-Pflege
Jokes Says:
April 9th, 2010 at 9:29 am
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Jocky Jokes
t-shirt mode Says:
June 1st, 2010 at 1:37 pm
Taxing a tax, it a nonsense. But I think it’s not the first time a democratic governement is trying that
SEO Pune Says:
June 3rd, 2010 at 6:42 am
thanks for this post, according to my point of view in some cases tax is essential,and lastly Gov use these taxes for us only. But its true said by you, Gov.didn’t say exactly where our money’s going.