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UK Fleshes Out Business Rates Relief for Fibre Broadband in Finance Bill

Friday, January 13th, 2017 (3:11 pm) - Score 1,259

The Communities Secretary, Sajid Javid MP, has today published the UK Government’s new Local Government Finance Bill that fleshes out their plans for a 100% business rates relief on new 5G Mobile and “full-fibre” (FTTH/P) broadband infrastructure, which is said to be worth £60m.

The Chancellor, Philip Hammond MP, first unveiled the proposed changes as part of his Autumn Statement in November 2016 (here), which among other things (e.g. a £400m Digital Infrastructure Investment Fund to support alternative broadband ISPs) also proposed 5 year relief from business rates on related infrastructure and this would run from 1st April 2017.

In keeping with that the Bill introduced into Parliament today claims it “will give these companies a tax break for up to 5 years on the new infrastructure they lay for full fibre broadband – a saving of £60 million, which can be reinvested in this work.”

Sajid Javid said:

“We need to have the best possible digital technology and broadband connections if we’re to create an economy that works for all.

The Local Government Finance Bill will offer a £60 million boost to deliver ever-faster broadband connections, making UK PLC an ever-stronger competitor on the global stage.”

However the relief only applies to new networks, meanwhile existing fibre optic broadband infrastructure is still under threat from a massive hike in business rates (here), which could potentially see the bills at major operators’ rise from an estimated £165m to £743m from 1st April 2017.

Not that any of this worries the Government, since according to them the new tax relief will give companies with existing infrastructure “an added incentive to move further and faster to get people connected to the best possible services as they become available.” Give with one hand, take a lot more away with the other.

Ross Murray, CLA President (Land Owners), said:

“Extra support for digital connectivity is welcome but it must deliver for the countryside. Rural communities are still struggling with unreliable connections, if they even have any service at all, which has negative consequences for people living and working in rural areas and also impacts on much needed rural tourism.

It is vital that as new technology is developed the countryside is not continually left behind. Incentives such as this tax break must push network providers to connect hard to reach rural areas faster so homes and businesses in the countryside see results from the funding and tax breaks that these large multi-national companies have been given.”

The Government must also ensure that any new policies recognise the positive role landowners and rural businesses can play in the roll-out programme, looking at opportunities for private investment and collaboration and smart solutions to building the infrastructure we need.”

End.

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Mark Jackson
By Mark Jackson
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 Twitter, , Facebook and Linkedin.
Leave a Comment
3 Responses
  1. Avatar DTMark says:

    I’m sure that I only suggested this about six years ago. That it might be a good idea to incentivise companies to work in the direction the government wants rather than penalising them. It’s hardly dynamic, is it?

    “It will give these companies.. a *saving* of £60 million”

    Love the Orwellian phrasing.

  2. Avatar AndyC says:

    I eagerly await sky and voda to say what great news it is for competition and the future rollout of fttp….. ps we wont build any but demand to use it at a price where we can profit from their work.

  3. Avatar Optimist says:

    The tax hike gives the telcos an excellent excuse for raising prices. This in turn will result in increasing yield from VAT.

    Presumably soon business rates will be levied on the radio spectrum used on wireless broadband….

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