Home phone News

‘Tell low-income Brits of landline tax exemption’ says consumer group

Tuesday 16 February, 2010

By Becca Talbot - becca@consumerchoices.co.uk

A consumer group is urging the government to make sure households on a social phone tariff are told they are exempt from the 50p landline tax.

The Communications Consumer Panel is urging the government to ensure that Brits on low-incomes realise that social home phone tariffs will be exempt from the proposed 50p a month landline tax.

The Panel, a group that advises regulator Ofcom on consumers’ best interests, has suggested that only 850,000 of a possible four million eligible homes on low incomes in the UK are currently on social landline tariffs, and that the government should do more to promote the exemption.

Social home phone tariffs, such as the BT Basic package, are designed for families on low incomes that receive certain benefits.

Consumer Panel chair Anna Bradley said the 50p landline tax is a “pragmatic” way to improve the rollout of superfast broadband in the UK, but that the Panel is “concerned” that many low-income landline customers could end paying the tax when they should be exempt.

She added: “The proposed duty is a fixed charge so would have a relatively greater impact on low-income households than on those with higher incomes.”

The 50p per month tax, introduced by business secretary Lord Mandelson in the Finance Bill, will be used to fund the £1billion Next Generation Fund, which aims to give 90% of homes in the UK access to superfast broadband by 2017.

The group is also concerned that elderly customers that have a landline but do not have a broadband connection will also be unaware that they will be exempt if they switch to a tariff such as BT Basic.

Bradley said 97% of people in the 65+ age group had a landline, but less than a third of the group had internet access in their homes. “For older people on very low incomes, an extra 50p per month on their fixed-line could represent a significant personal investment in a future service from which they are unlikely to benefit,” she added.