Scotland Gives 10 Year Business Rates Holiday to Fibre Broadband

On 1st April 2019 the Scottish Government will go one big step further than the UK Government in Westminster by introducing 100% relief from business rates on new “fibre broadband infrastructure“. Better yet, the tax break is set to last for 10 long years until 31st March 2029.

The UK Government has had a 5 year holiday on business rates for new fibre optic (FTTP / FTTH) broadband infrastructure since 1st April 2017. Many operators have called for this to be extended, not least since such providers usually have to plan their investments over much longer periods of 10-15 years in order to reflect the lengthy payback for such expensive upgrades.

Meanwhile Scotland’s £600 million R100 programme is currently in the process of choosing a supplier, which will have the difficult job of getting as close as possible to universal coverage of 30Mbps+ “superfast broadband” by the end of 2021 (here and here); March 2022 as a financial year. In keeping with that effort they’ve now introduced an even longer holiday on business rates.

The relevant legislation for this change was finally laid before the Scottish Parliament on 18th February 2019 (here), although ISPreview.co.uk somehow managed to overlook this important development until today. The change itself formed part of last year’s Scottish Budget 2019-2020 announcement.

The development will make it significantly more affordable to build new “full fibre” (FTTP/H) broadband networks over the next decade, which should be particularly useful in Scotland where there’s a lot of wide open and quite rugged terrain to dig with optical fibre cables. Essentially, this will make the business case for extending such networks more attractive; particularly useful for those bidding on the R100 contract.

Apparently eligibility for New Fibre Infrastructure under this relief is still subject to compatibility with EU State Aid rules (unless that comes to an end post-Brexit).