The Chancellor has announced the introduction of UK VAT on roaming telecoms services used outside the EU for the first time, meaning that holiday makers and business travellers will see a 20% hike in call charges
The measure is set to raise £175m by the end of this parliament in 2020, raising £65m in the first full year of charging. This will come into force from April 2017.
This will increase the cost for UK consumers using mobile devices outside of the EU.
Daniel Lyons, indirect tax partner at Deloitte, said: ‘This will create an extra VAT cost in relation to mobile telephone use – including data – where the device is being used outside of the EU.
‘Under current VAT rules such charges to individuals do not incur UK VAT. Going forward 20% VAT will apply.
‘With the UK’s impending exit from the EU it had been envisaged that VAT-free roaming would also apply to use and enjoyment of devices in the remaining EU member states. However, the Chancellor’s announcement shows this is unlikely to be the case.’