6/22/2010 4:35:00 PM
VAT raised and broadband tax dropped in the Budget
A raft of new tax measures were introduced to Parliament today as Chancellor George Osborne revealed his emergency budget.
Increased VAT will have an impact on mobile contract bills, where VAT is added after the monthly price, while prepay handsets will see a 2.5% hike.
Major changes likely to have an impact on businesses and the telecoms industry include:
- a 2.5% hike in VAT from 17.5% to 20% from 4 January 2011
- the 50p landline tax to fund high-speed broadband will be dropped
- Corporation tax will be cut next year to 27% and then for another three years at 1% until it reaches 24%
Osborne said: ‘Growth in the UK economy for the coming five years is estimated to be: 1.2% this year and 2.3% next year; Then 2.8% in 2012 followed by 2.9% in 2013; then 2.7% in both 2014 and in 2015.’
He continued: ‘In this Budget everyone will be asked to contribute. But in return we make this commitment. Everyone will share in the rewards when we succeed. When we say that we are all in this together, we mean it.’
A 3 spokesperson said: 'We are pleased that the Government recognises the importance of addressing the issue of Spectrum as soon as possible.'