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Broadband tax could have bigger impact on smaller firms. Pearson May News Update - Thursday 17 December
Broadband tax could have bigger impact on smaller firms
Small businesses may end up paying more under the government’s proposed landline duty than their larger counterparts.
The duty, confirmed in the pre-Budget Report, will see 50p a month charged on each business and domestic landline, the money earmarked for upgrading the UK’s broadband network to superfast delivery speeds.
The Treasury’s consultation paper on the tax, however, has conceded that small businesses, often with several individual lines, could end up facing a higher bill than larger companies that have fewer, multi-capacity connections.
Entitled ‘Implementing a Landline Duty’, the consultation document says that there might be an “imperfect relationship between the amount of duty paid and the size of the business in terms of number of employees”.
The paper went on to highlight the possible benefits to bigger employers of bespoke telecommunication solutions. Large offices that only have a single, high capacity fibre connection could pay as little as 50p a month.
In the case of smaller firms, however, those with less sophisticated systems could find themselves paying for each individual copper line that they use.
The duty will be chargeable on any line that is available to a firm irrespective of whether it is being used or not.
In instances, though, where both broadband and voice services are supplied via a single provider through a number of cables the customer will only face one charge.
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