THE TV licence could be scrapped by the BBC as business leaders said it was “not fit for purpose” and is “basically a poll tax for telly in a streaming world”.
The BBC has warned that the licence fee is in “irreversible” decline and urged the Government to back a new, “fairer” funding mechanism, which could see people pay less.
Evasion and non-payment cost the BBC more than £1billion last year and the licence is set to rise to £180 in April, the BBC said.
In its 100-page response to the Government’s Charter Review consultation, the BBC said it was looking into its first licence fee cut in history, if the number of paying households increased.
The BBC last year brought in £3.8bn of revenue from the licence fee in 2025 – but the corporation said it is looking into different revenue streams.
It said it could scrap the licence fee and introduce a system similar to that in Germany where citizens pay a “digital public service media” tax of €18.36 (£16) per month – even if they do not watch or listen to the nation’s equivalent of the BBC.
Or the Finland example, where it is taken as a tax “linked directly to an individual’s personal income” – rates range from €0 to €160 (£139) for individuals over 18, and up to €3,000 for businesses.
A poll tax for telly in a streaming world
Naina Clayton, Founder at Sandwoman Business Support, said the TV licence needs to be scrapped.
She added: “The TV licence is archaic and should have been banned a long time ago. It is ridiculous that pensioners still have to pay for this unless they are over 75. These days with the cost of living and a choice between food or heat, and a lot of pensioners only having television as a companion, it should not be necessary to pay to watch that too.
“I disagree with making it compulsory that every household has to pay something regardless if they watch BBC or not. These days people use streaming devices because they find the public channels can be limiting in diversity and choice.
“I don’t think the BBC should be forcing fees onto every household to create revenue for themselves. They should look at the streaming services and how they manage revenue and consider those practices.”
Kate Underwood, Founder at Southampton-based Kate Underwood HR and Training, said a new model was needed.
She continued: “The licence fee is basically a poll tax for telly in a streaming world, and people are voting with their feet. Is it fit for purpose? Nope. It was built for aerials and live TV, not iPlayer, clips and ‘I don’t watch BBC, honest’.
“When payment relies on confusion, guilt and enforcement, evasion is baked in. And let’s be blunt: trust has taken a battering. When the BBC messes up, it can look like the cheque book comes out before accountability does. Yes, settlements aren’t proof of wrongdoing, and they’re often a legal cost-control move. But the optics are rotten. People feel like they’re paying for someone else’s mess, not great broadcasting.
“What’s fairer? Finland-style income-linked funding is the most grown-up option. Germany’s flat charge is simpler but hits lower earners harder. Cut the fee? Not until you fix the leaky bucket. Any new model needs automatic collection and ruthless transparency on pay-offs and decision-making, or the resentment, and evasion, won’t shift.”
The TV licence is archaic
Rohit Parmar-Mistry, Founder at Burton-on-Trent-based Pattrn Data, said the BBC needs protecting.
He added: “The BBC planning for the end of the licence fee sounds sensible, but the key question is what they are planning for. A transition that protects public value, or one that mainly protects internal structures. Any replacement model will reshape incentives.
“Subscription pushes towards premium entertainment and away from universal services. Advertising rewards volume and attention. General taxation can work, but only with hard independence safeguards and multi-year settlements so funding is not a political lever.
“If the BBC wants legitimacy in this debate, it should be explicit about what it will deliver in return: measurable public outcomes, clearer accountability for spend, and a service proposition that reaches beyond the already converted. Planning should start with what the public needs, not what the institution wants.”
Kate Allen, Owner at Kingsbridge-based Finest Stays, said the BBC is extremely valuable.
She continued: “The BBC is far more than a television service, so comparing it with subscription platforms like Netflix misses the point. It underpins a huge public ecosystem, from national and local radio to trusted journalism and global news through the BBC World Service, one of the UK’s most powerful soft-power assets abroad.
“It also plays an important cultural role, supporting British music, drama and national fundraising events such as BBC Children in Need and Comic Relief, which have raised billions for charity. If the licence fee is no longer fit for purpose, the question is how to modernise funding without weakening that public mission.
“The German or Finnish models, where a universal media levy or income-linked charge replaces the licence fee, arguably reflect modern media habits. But any new system must ring-fence the funding and keep it clearly independent from government.”
Photo by Joshua Chehov on Unsplash.
