Budget 2017: mobile phone users to face higher charges overseas

8 March 2017

Using your mobile phone outside of the European Union is set to become more expensive as VAT will be added to your roaming charges.

At present UK mobile users pay VAT when they use their phone within the European Union, but no such charges are applied when phones are used outside the EU.

That situation will soon change as Chancellor Philip Hammond announced plans in his Budget speech to charge 20% VAT on calls, texts and data usage worldwide.

The new rule will be introduced in the 2017/18 tax year and is expected to cost consumers £45 million in the first year and £65 million a year thereafter.

Mr Hammond says this change will bring the UK in line with other countries and ensure mobile phone providers cannot use such inconsistencies to avoid paying VAT.

He told the Commons that he wanted to “introduce UK VAT on roaming telecoms outside the EU in line with international standard practice”.

Many people already choose to purchase foreign SIM cards when travelling abroad and this is likely to increase in popularity following this decision by the Chancellor. Read the Moneywise guide to avoiding high bills when travelling overseas.

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