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Radical changes to the licence fee planned by the government would see it covering streaming platforms such as YouTube , Netflix , and Amazon Prime Video to reflect how contemporary audiences consume content. The Independent revealed on Thursday that the government is set to unveil plans to extend the licence fee to the streaming services, in what is unofficially being dubbed a “ YouTube tax”, as part of proposals on how to overhaul the current funding model to increase revenue. A senior Whitehall source told The Independent the plan is to expand the licence fee so that it applies to streaming platforms , with the aim of preventing people avoiding paying it by watching content on the internet via their phones, tablets or computers.
The new arrangements have been dubbed the YouTube tax because the site is by far the biggest online video platform in the UK, with around 55 million users with 79 per cent penetration in the British market. The source explained that the move was “because people are able to use them to avoid paying currently”. They added: “It’s not fair that people are essentially able to watch television content but avoid the licence fee.” The licence fee goes towards funding the BBC (PA) A white paper on the BBC charter renewal will be published before Christmas.
It comes as the national broadcaster faces many questions about the licence fee, which costs £180 per year but is free for people aged 75 and older who receive pension credit, and 50 per cent discounted for the visually impaired. Here, we look at how the change to the licence fee could work. How does the licence fee currently work?
Currently, a TV Licence mainly covers live programming. You need a licence to: Watch or record TV on any channel on any TV service (like Sky, Virgin Media and Freeview). Watch live on streaming services (like ITVX, All 4, YouTube and Amazon Prime Video ).
Use BBC iPlayer However, under current rules you do not need a licence if you exclusively watch on-demand streaming services which are not BBC iPlayer . This includes watching films or TV series on demand (not live broadcasts) on platforms such as Netflix, Apple TV, or Amazon Prime Video. What questions is the BBC facing on the licence fee?
The BBC says that 94 per cent of households are using its services, only 80 per cent are paying. The most recent figures revealed that around 539,000 fewer TV licences were in force in the year to 31 March 2026. There has been a drop of around two million over the past five years.
At the start of this month, the Digital, Culture, Media And Sport Committee ( DCMS ) recommended that the BBC extends the licence fee to cover services other than TV and that the charter review is scrapped and made permanent. In its recommendations, the DCMS said the BBC needed to be more independent from political interference, also suggesting that the corporation should scrap political appointments to its board, and that it considers appointing its chair independently. The report, which featured the recommendations, read: “The fact that the BBC’s existence is called into question every 10 years creates an avoidable opportunity for political interference which has damaged the perception of the BBC’s independence.
“It also creates a disproportionate distraction for the BBC when it needs to be focused on its mission to inform, educate and entertain. We therefore recommend the next BBC charter be a permanent charter and not include an end date.” When making recommendations about the licence fee, the DCMS said its current model was “outdated and no longer fit for purpose”, and also suggested that the BBC reduced the cost from its current price of £180 per year. How would the ‘YouTube tax’ work?
BBC director-general Matt Brittin has said that he wants BBC News to be on streaming sites such as Netflix in a bid to reform how the broadcaster’s content is consumed and paid for. BBC director general Matt Brittin (Reuters) Mr Brittin previously said the corporation was being “held back” by its TV licence fee, which was “no longer fit for purpose”, and suggested it could be replaced by a household levy. Under the so-called ‘YouTube tax’ approach’s proposals, it is expected that those who use streaming services to watch content would have to pay for a television licence, even if the films or series they are watching are not live.
It is estimated that an extra 3 to 4 million households will have to pay the licence fee if it is extended in that manner. It is understood any new cash raised under the plan will need to be spent on reviving local journalism and tackling misinformation.
Source: The Independent
