BT Group Warn UK Gov Not to Choke Broadband Investment with Biz Rates Hikes
The Chief Financial Officer (CFO) of BT Group, Simon Lowth, has called on the UK government to “rethink” its proposed changes to UK business rates, which they warn could “risk a slowdown” in digital infrastructure (broadband and mobile) investment and lead to “higher bills” for consumers and businesses.
The issue centres on the Government’s major plan to abolish the notoriously complex Valuation Office Agency (VOA), which oversees how business rates are calculated, and shift its functions into HM Revenue & Customs (HMRC). In theory, this could be a positive move, especially if it results in a fairer and more transparent system for everybody, but the expectation is that business rates will remain an industry-wide bugbear.
The financial impact of this and related changes by the VOA on firms like BT (see below) is currently said to be “unknown“, and will depend on the outcome of ongoing discussions with the VOA, and on decisions taken at the next Budget on 26th November 2025. But BT’s CFO fears that the government’s plans may increase the tax on digital infrastructure and “threaten investment across a broad range of [other] infrastructure sectors“.
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“Our in-depth analysis suggests that this reform could reduce business investment by £1.4 billion over five years, and permanently shrink the UK’s economy by £1.5 billion a year. That turns a supposedly revenue-neutral policy into one that actually costs the Government £600 million annually,” warned Lowth.
Simon Lowth, BT Group CFO, said:
“The VOA is currently revaluing every commercial property in the UK. This is a major concern to businesses of all sizes, as it has been argued that its approach can lack transparency and accountability. There is also a significant risk that the VOA takes decisions which stifle economic growth.
At the same time, the Government is also introducing a new reform charging a higher rate to businesses with properties and physical infrastructure valued over £500,000, which aims to fund lower tax rates for retail, hospitality, and leisure firms.
The goal was to get online giants to pay more while giving high street firms a much-needed break. But the reality is more complicated – with serious unintended consequences for the services that keep the country and the economy running.
These changes could instead result in a small number of UK infrastructure providers bearing a disproportionate level of the cost – potentially up to £400m between them each year. These are businesses investing in the energy, transport, and digital networks that underpin the economy and the country as a whole. Penalising them risks slowing investment in the fabric of the nation and the networks and services we need to fuel growth.
Meanwhile, large distribution warehouses – often associated with online tech giants – could end up contributing just £250 million a year between them. But that figure also includes warehouses used by haulage firms and UK retailers, meaning that tech giants may only pay a small portion of what is needed to properly support small businesses.
As a result, these reforms are unlikely to rebalance the system in favour of the high street. And more than that – the new business rates could become a tax on UK infrastructure, at a time when the country needs investment most.”
The remarks echo what BT’s CEO, Allison Kirkby, said last month when she warned against further increases in the country’s already high tax burden and specifically highlighted business rates (here). The risk is that, if the tax burden becomes too aggressive, then BT may shrink or slow some of its planned deployments and that could in turn impact the government’s own digital infrastructure targets (BT won’t be the only ones to react in such a way).
The catch is that BT is currently up against stiff competition in both the mobile and broadband sectors, thus any slowdown in their ambitions or scaling back might leave them at more of a competitive disadvantage in some areas. On the flip side the government is busy trying to make its public finances work without borrowing more and increasing the country’s already hefty debt mountain. But tax too much and investment may fall.
The UK’s public sector net debt was approximately 96.4% of Gross Domestic Product (GDP) in August 2025, and general government gross debt was 101.3% of GDP at the end of 2023. In other words, the total national debt is roughly the same as the country’s annual economic output. The UK has to pay interest on its national debt, with payments on central government debt reaching £8.4 billion in August 2025 alone.
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Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on X (Twitter), Mastodon, Facebook, BlueSky, Threads.net and Linkedin.
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The appeal will fall on deaf ears. The government is going to raise taxes by tens of billions no matter what. Every sector is arguing it should be excluded from the raid but any exclusions just mean an even higher burden falls on everyone else. It is just not a good situation all round. The government have got us in a right pickle over the last 20 years.
Unfortunately most of the same groups as usual for the past 40 years continue to be excluded leaving productive investment and labour to pick up the tab regardless of the colour of the rosette in charge.
Tax reform is hard. Taxing wealth is tricky and the people with the largest amount of it own the politicians. Taxing infrastructure is easy. Taxing work is easy.
The UK has passed the point where raising taxes will increase revenues.
The correct answer is to make substantial cuts to government spending and to do it before the markets force the government’s hand.
The government even went ahead and made the UK the only country in europe to tax education, resulting in most schools closing, taking little tax and putting even more pressure on gov schools
Hell now they even want global shipping taxes, as if the price of food hasn’t soared enough
They would tax the air if they could
Far2329Light says:
The UK has passed the point where raising taxes will increase revenues.
The correct answer is to make substantial cuts to government spending and to do it before the markets force the government’s hand.
Utter right wing tosh, there is very little left to cut after decades brutal cuts in services for everyone, whilst reducing the tax burden on the very wealth highly profitable corporation. Successive UK governments both Conservative and Labour have cut taxes for those that need them least while raising the tax burden on higher rate tax payers like myself. In the meantime they have raised the tax threashold repeatedly for low earners, again this acts as a subsidy for the wealthy and corporations who don’t invest back in the UK but ship them off to tax havens abroad. This further impoverishes our country.
The answer is simple, wealth taxes on wealthy. They can’t just walk off to Dubai with property and business investments. We have had decades of low taxes for the wealthy and the country is nearly bankrupt because of it.
Tax wealth not work.
@JimB:
Noit is not. The current level of taxation is unsustainable.
The proportion of the UK economy related to government spending has grown, so there is more to cut than ever before.
The only choice we have is to cut now, or to cut later when the markets force the government’s hands.
“The answer is simple, wealth taxes on the wealthy. They can’t just walk off to Dubai with property and business investments.”
Yet that is exactly what happened to Macron’s France when he tried that experiment and found out the hard way.
BT makes a fortune and pays its execs a fortune. Both can afford to pay more and still invest in the business.
Investment comes from investors. They will sit on their hands or invest elsewhere if the returns to be made in telecoms evaporate. BT’s profits have to fill the hole in the pension fund and deal with the debt pile.
Have you taken a look at the debt pile they have amassed rolling out FTTP. Have you nay idea how long its going to take them to pay that off while paying the interest each year.
But agree, their execs earn a fortune.
Businesses are not charities. Further, if the economic conditions do not justify the investment, the investment will not happen.
As it is, the government has crushed the economy with many businesses about to freeze hiring while increasing redundancies.
Eventually, the government will be forced to cut expenditure, including for the funding of initiatives in the telecoms sector.
BT is likely only worried about the rates being re-assessed because ISTR they currently pay a fraction of what everyone else pays per km for their fibre due to a legacy sweetheart deal.
What do business rates have to do with price Openreach pays for fibre?
Telecoms companies pay business rates for their masts, exchanges, ducts, poles, cabinets and the cables in and on them, Winston.
BT pay a lower rate for historical reasons.
@Polish Poler:
In many cases, competitors are using Openreach infrastructure and so are getting a free ride as far as business rates are concerned.
84.08khz are the profits being used to full the pension hole?
Why is there a pension shortfall anyway? Surely the business has failed to add sufficient funds to the fund over the years, opting to pay shareholders and execs more than they should?
The problem is fully documented if you care to look for the facts.
It is a bluff, We have already been told OR are haemorrhaging customers where they have no FTTP, so why would BT stop deployment to save a “little” tax to but to lose “big” revenue.
It is BT that is voicing the concern, but the discussed changes would pretty much impact pricing across the whole of the broadband sector.