The BBC licence fee could be replaced with a new, cheaper charge under plans discussed by Culture Secretary Lisa Nandy.
Ministers are understood to be actively considering alternative funding models to replace the £180 a year tax.
The licence fee must be paid by any household that watches or records live TV or uses catch-up services such as BBC iPlayer. Those who solely watch streaming providers like Netflix or Disney+ are not required to pay the levy.
Under plans being considered by ministers, the licence fee would be replaced with a new £11-a-month broadband charge.
The tax would be applied directly to a household’s bill.
Introducing the new funding method would save households who currently pay the licence fee just under £50 a year, but would lead to a larger number of people being made to pay the tax.
The rise of internet streaming services has led to an ever-increasing number of households not paying the licence fee. Evasion of the charge is also on the up each year.
In the 2025-26 financial year, 23.3 million households in Britain paid for the licence fee. The figure is a drop of 539,000 compared to the year before.
Nandy admitted last year that she was thinking “quite radically and creatively” about alternatives to replace the TV charge.
She said at the time: “There is no question in my mind that the licence fee is not only insufficient, it’s raising insufficient money to support the BBC.”
She added: “In other countries in Europe, they find different ways of raising money.
“In France, for example, they have a levy on cinemas.”
Proposals to replace the licence fee with the new broadband charge were put forward by the Social Market Foundation think tank.
“Internet in the home is increasingly the way that people receive video content, and video content drives a substantial share of internet usage,” the report said.
The Social Market Foundation also stated that polling indicates a “home internet levy” was the alternative funding model most likely to be agreed with by the British public.
Ministers are looking at alternative funding models to the licence fee as part of its once-a-decade review of the BBC’s Royal Charter, which sets out how the broadcaster is governed, regulated and funded.
The current charter is due to expire on December 31, 2027, with discussions on whether any changes should be made for the 2028-2038 period taking place.
A Department for Culture, Media, and Sport spokesman said: “The BBC must be funded by a model that is sustainable and fair to all those that are paying it.
“Through Charter Review, we are looking at a range of options, including how the BBC can operate more efficiently, generate more commercial revenue, and how the licence fee could be reformed.”
