Is broadband a utility bill?

When you pay for broadband, you’re typically paying for an internet connection that keeps you connected to the world. But is broadband a utility bill?

Understanding whether broadband is considered a utility is essential for both consumers and businesses, especially when it comes to managing expenses and tax considerations. In this blog, we’ll explore what is considered a utility bill, whether broadband qualifies, and how broadband costs are categorised.

What is considered a utility bill?

Utility bills are typically payments made for essential services that are needed for daily living. These services are necessary for maintaining a household or business, often provided by public or private companies.

Common examples of utility bills include:

• Electricity: Power used to run appliances, lights, heating, etc.

• Water: Supply and drainage of water for your home.

• Gas: Heating and cooking energy, generally provided through a network of pipelines.

• Sewage services: Wastewater removal.

• Rubbish collection: Regular collection and disposal of household waste.

In general, a utility bill is a regular recurring charge for services that ensure your home or business functions properly.

Should broadband be classified as a utility?

Broadband, especially in today’s world where we are more connected than ever, is often considered an essential service. With more people working from home, studying online and relying on internet services for communication, shopping, and entertainment, broadband has become an indispensable part of daily life. However, whether broadband is a utility bill remains a subject of debate.

Broadband as an essential service

There’s a growing case for broadband to be recognised as an essential service. As access to the Internet has become more critical for education, work and social interaction, many argue that broadband is a utility bill and should be classified as such.

In fact, during the COVID-19 pandemic, the demand for internet access skyrocketed as millions of people transitioned to remote working and learning. This highlighted the crucial role broadband plays in modern life, further solidifying its place as an essential service.

Comparisons with other utilities

When compared to traditional utilities like gas, electricity, and water, broadband serves a similar function in terms of enabling day-to-day activities. However, broadband services are not always considered to be as fundamental or universally available as the utilities mentioned above. For example, while most households have access to basic water and electricity, broadband access can still be limited in rural areas, depending on the infrastructure available.

While broadband may be essential for many, it’s still largely categorised differently from services like water or gas in most legal frameworks and by utility companies.

How broadband costs are categorised

Broadband costs are usually categorised differently from traditional utility costs, mainly due to their relatively recent emergence as a public service. These costs are typically classified as communication or subscription fees, not utilities. Let’s look at how broadband costs break down.

Business vs residential broadband bills

For businesses, broadband costs are often treated as a necessary operational expense, similar to any other communication or infrastructure costs. For residential customers, broadband is typically a discretionary expense that can vary depending on the speed, plan, and provider chosen. Some countries and jurisdictions do offer discounts or subsidies for broadband access, especially in underserved areas, but these costs are generally not integrated with traditional utility billing.

Tax deductions and broadband

In the UK, broadband costs can be tax-deductible under certain circumstances, particularly if you use the internet for work purposes. For individuals who work from home, such as freelancers or those with a home office, a portion of their broadband costs can be claimed as a business expense. The amount you can claim will depend on how much of your internet usage is work-related.

For example, if you use your broadband 50% of the time for business, you may be able to claim 50% of the cost as a tax deduction. This applies to both broadband subscription fees and any equipment used to access the internet, like routers and modems.

It’s important to keep detailed records of your usage and the portion of broadband used for business purposes. HMRC (Her Majesty's Revenue and Customs) provides guidelines on what can be claimed, so it’s always a good idea to consult the latest rules or seek advice from a tax professional to ensure you’re claiming correctly.

For those who work full-time from home, the tax deduction for broadband could be more substantial. However, if the broadband is used predominantly for personal purposes, it’s unlikely that you’ll be able to claim the costs on your tax return.

In conclusion

While broadband is undoubtedly a vital service in this generation, is it still considered a utility bill in the same way as electricity, gas or water? As internet access becomes increasingly essential for all aspects of life, some may argue that broadband should be considered a utility. Whether or not broadband officially becomes a utility, it still remains an indispensable part of modern living, and managing broadband costs effectively is crucial.

If you’re ready to explore your options and find the perfect broadband deal for your needs, check out our range of packages or call us at 020 4571 3851. Our friendly customer service team is here to help make your switch to Hey! Broadband a swift and stress-free experience!