Home
 » ISP News » 
Sponsored

B4RN Win Support from MP Tim Farron Over Loss of EIS Tax Relief

Thursday, January 31st, 2019 (1:06 pm) - Score 1,305
tim_farron_libdem

The Liberal Democrat MP for South Lakes, Tim Farron, has given his support to rural ISP B4RN over the recent loss of their tax relief following changes to the Enterprise Investment Scheme (EIS), which he warned could “undermine the good work of broadband pioneers” in such remote UK communities.

The current situation stems from an article we wrote on Saturday (here), which revealed how the Government had decided that B4RN, as well as other Community Benefit Society (CBS) based broadband operators, were seemingly no longer eligible to benefit from any tax breaks or other support afforded by the EIS (here).

As most readers known B4RN builds Gigabit capable “full fibre” (FTTH) broadband networks in some of the most challenging rural areas. In order to do this they rely on volunteers helping to build the network (usually in exchange for shares instead of cash) and landowners (e.g. farmers) agreeing to waive their right to payment under a wayleave (access) agreement.

On top of that any money they make is reinvested back into their network and used to further improve coverage. Unfortunately HMRC now appears to have deemed their approach to be “fundamentally uncommercial” (i.e. not setup to make a profit), which is kind of the point but also locks B4RN out from the benefits of EIS tax relief and sends a similar signal to other such CBS based alternative network ISPs.

We have been trying to get a clear comment from the Government about this all week but without much luck (DCMS passed us to HM Treasury and the latter has yet to respond). Thankfully Tim Farron MP appears to be having a bit more luck and put the question directly to the Government’s Chancellor, Philip Hammond MP, during yesterday’s House of Commons debate on Deficit Reduction.

Question – Tim Farron (Westmorland and Lonsdale) (LD)

“World-class connectivity is vital to tackling the deficit, but the Treasury’s decision to stop investors in community benefit societies receiving 30% tax relief could undermine the good work of broadband pioneers such as Broadband for the Rural North—B4RN—in Cumbria.

Given that B4RN has reached the parts of Cumbria that the Government and BT could not or would not reach, what assessment has the Chancellor made of the effect of that decision, and will he think again about his damaging proposals?”

Answer – Mr Hammond

“I am not familiar with the case to which the hon. Gentleman has referred, but obviously we want to encourage the delivery of high-speed connectivity in all areas, including rural areas. If the hon. Gentleman wishes to write to me with the details, I shall be happy to look at them and respond to him.”

In the meantime some of the smallest projects might be able to seek similar support via Social Investment Tax Relief (SITR), although this is limited to a maximum investment of £1.5m (EIS caps at £12m and B4RN is already at around £6m) and a fair few full fibre projects could hit that fairly quickly (FTTP/H is anything but cheap).

One fear is that if operators of a similar size cannot access this kind of support then it may simply result in the Government eventually needing to dole out even more public funding in order to resolve a problem that, in some areas at least, the local community could have done by itself.

Add to Diigo
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
5 Responses
  1. Avatar chris conder

    Indeed so, it is very shortsighted of government to remove EIS for projects like B4RN. B4RN do have to make a ‘profit’, the difference to a ‘normal’ business is that they aren’t allowed to keep the profit they have to re-invest it into the business and community. Many other community models are the same, and it is what makes it work. The people are willing to invest their time and money to make something good happen, and EIS was really helpful. Let us hope the chancellor can fix it so that other areas can do the same as the pioneers have.

    • Avatar Brin

      EIS was vital for our 1gig FTTH project as no grants were paid until connections were live.
      http://www.myfi.wales
      Doubtful if we could have raised our start up capitol without EIS and our award winning project would not proceed

  2. Avatar Dave

    Never thought I would agree with Tim Farron miracles can happen

  3. Avatar Martyn Dews

    Well done Tim. I shall look forward to seeing the Chancellor’s response.

    When I was involved in B4RN back in the early days and heard people mention the phrase “non-profit”, I’d correct them. As Chris said, B4RN does make a profit and I’d hazard a guess that it’s quite healthy, the only difference is that the profit has to go back into the improving the service or the community rather than lining shareholder’s pockets.

    The removal of EIS from companies like B4RN is shortsighted and needs to be reviewed in my opinion.

Comments RSS Feed

Javascript must be enabled to post (most browsers do this automatically)

Privacy Notice: Please note that news comments are anonymous, which means that we do NOT require you to enter any real personal details to post a message. By clicking to submit a post you agree to storing your comment content, display name, IP, email and / or website details in our database, for as long as the post remains live.

Only the submitted name and comment will be displayed in public, while the rest will be kept private (we will never share this outside of ISPreview, regardless of whether the data is real or fake). This comment system uses submitted IP, email and website address data to spot abuse and spammers. All data is transferred via an encrypted (https secure) session.

NOTE 1: Sometimes your comment might not appear immediately due to site cache (this is cleared every few hours) or it may be caught by automated moderation / anti-spam.

NOTE 2: Comments that break our rules, spam, troll or post via known fake IP/proxy servers may be blocked or removed.
Cheapest Superfast ISPs
  • Hyperoptic £20.00 (*22.00)
    Avg. Speed 50Mbps, Unlimited
    Gift: None
  • Vodafone £22.00
    Avg. Speed 35Mbps, Unlimited
    Gift: None
  • TalkTalk £22.45 (*36.00)
    Avg. Speed 38Mbps, Unlimited
    Gift: None
  • Post Office £22.90 (*37.00)
    Avg. Speed 38Mbps, Unlimited
    Gift: None
  • Direct Save Telecom £22.95 (*29.95)
    Avg. Speed 35Mbps, Unlimited
    Gift: None
Prices inc. Line Rental | View All
The Top 20 Category Tags
  1. BT (2512)
  2. FTTP (2204)
  3. FTTC (1658)
  4. Building Digital UK (1607)
  5. Politics (1428)
  6. Openreach (1419)
  7. Business (1239)
  8. Statistics (1099)
  9. FTTH (1076)
  10. Mobile Broadband (1039)
  11. Fibre Optic (969)
  12. Ofcom Regulation (916)
  13. Wireless Internet (909)
  14. 4G (900)
  15. Virgin Media (857)
  16. Sky Broadband (595)
  17. EE (592)
  18. TalkTalk (580)
  19. Vodafone (518)
  20. Security (413)
Promotion
Helpful ISP Guides and Tips
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
»
Sponsored

Copyright © 1999 to Present - ISPreview.co.uk - All Rights Reserved - Terms , Privacy and Cookie Policy , Links , Website Rules , Contact