Why broadband is essential and not a luxury

Pulse Fibre believes it’s time for the conversation around broadband to ask a more fundamental question: why is it not yet classed as an essential service? With millions of households under financial pressure, the company is adding its voice to the growing call for broadband to be treated in line with other core utilities.

Broadband is an essential feature of daily life. We depend on it just like the air we breathe. We rely on it in our homes, in our work, and for education, health and finance. When we are cut off from digital access, we are effectively excluded from society. In the same way we cannot function without electricity, gas or water, broadband should now be recognised as an essential utility.

Despite this, broadband continues to be treated differently and is taxed like a luxury item. Currently, telecommunications and internet access are subject to the standard VAT rate of 20%. By contrast, most essential utilities are taxed at a reduced rate of 5% or are exempt altogether. This discrepancy adds unnecessary cost to households at a time when digital connectivity is no longer optional, but vital.

“Broadband is as essential as electricity in today’s world. We rely on it for work, education, healthcare access, and staying connected. Yet it continues to be taxed as though it were a luxury service,” said Reece Dopson, Finance Director at Pulse Fibre. “We welcome the broader industry conversation around VAT reform and believe aligning broadband with other essential utilities would help ease financial pressures and support digital inclusion across the UK.”

Making broadband an essential utility and lowering VAT could help bridge the digital divide by making internet access more affordable for households across the country, ensuring that those most at risk of digital exclusion are not left behind.

Pulse Fibre supports continued discussions among policymakers, industry leaders, and the public about how broadband is recognised and taxed, and has published an in-depth blog exploring the issue further.