Virgin Media O2 urges government to reduce social broadband VAT to 5%

Lutz Schuler
(Image credit: Virgin Media)

Virgin Media O2 has urged the government to reduce VAT on social broadband and mobile tariffs from 20% to 5% to help consumers cope with the cost-of-living crisis.

The company said it was committed to helping its customers as much as possible, citing its creation of a national databank and plans to expand the eligibility criteria for its social tariffs which are usually available to those in receipt of universal credit.

However chief executive Lutz Schüler said there was more that could be done and echoed consumer watchdog Which?’s call for VAT to be reduced to the same amount levied on other utilities like gas and electricity. This could save households an average of £120 a year.

Broadband VAT

“By cutting VAT on social tariffs to 5%, as Which? has been calling for, Government could put more money back into the pockets of those struggling most in a targeted way,” he said. “We would pass on any social tariff VAT cut in full and urge the next PM to review this as a priority.”

Which?’s analysis of Ofcom data found that 5.7 million households, or a fifth of all homes in the UK, experienced at least one affordability issue during April 2022. Meanwhile the number of households that experience multiple affordability issues increased by 56% from February 2022.

However, it said the fact that many people were willing to cut back on other areas rather than lose their broadband or mobile connection highlights the fact that connectivity is now essential to everyday life and that taxation should reflect that.

Schüler added that Virgin Media O2 would introduce a new government tool that automatically assesses social broadband eligibility

“This was very welcome news and something we’ve long called for,” he said. “We’re committed to using this API as soon as possible, with work already underway to implement it, and we will also expand our eligibility criteria to include a wider range of benefits so even more people can access our social tariff.”

Several other major broadband providers offer social tariffs and many mobile operators have donated free data to the national databank or provided free SIM cards to those most in need.

Steve McCaskill is TechRadar Pro's resident mobile industry expert, covering all aspects of the UK and global news, from operators to service providers and everything in between. He is a former editor of Silicon UK and journalist with over a decade's experience in the technology industry, writing about technology, in particular, telecoms, mobile and sports tech, sports, video games and media.