Holidaymakers are to face even steeper phone bills if they try and use their mobile abroad following an announcement in the Government’s Budget.

Chancellor Philip Hammond announced that mobile phone roaming charges outside the EU would be subject to VAT, a 20 per cent tax paid by the consumer.

As a result, mobile phone roaming bills will rise by 20 per cent.

Sky-high roaming charges already mean that holidaymakers can pay hundreds of pounds for services they would get for free while at home – with many forgoing phone use as a result or even buying a local SIM card for the duration of their travel.

In his Budget speech Mr Hammond told the House of Commons his annual spending plan contained measures “to introduce UK VAT on roaming telecoms outside the EU in line with international standard practice”.

It is not clear whether the provision would apply to all European countries once Britain has left the EU, which the Government plans to do in 2019.

Philip Hammond outlines further VAT charge on roaming outside UK in Budget 2017

The European Union is due to phase out mobile phone roaming charges altogether for countries within the bloc. The UK may not continue to benefit from this measure once it comes into effect as it is leaving the union, however.