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UK ISP Vtesse Networks Loses Case Against Unfair Fibre Optic Tax

Posted: 17th Feb, 2010 By: MarkJ
vtesseISP Vtesse Networks has lost its case against unfair fibre taxes issued by the Valuation Office Agency (VOA). Vtesse claimed that the VOA taxes its fibre network in a different way from BT, which results in higher and thus unfair costs.

It's reported on Thinkbroadband that the standard method involves paying a 45.6% tax when the fibre is lit and is based on the hypothetical rent (factoring in length of the fibre) which could be achieved from renting out the fibre.

BT however are not taxed per kilometre but based on the overall rentable value that the VOA deems is available for their network, averaged over 5 years. If they were forced to pay in the same way as Vtesse then it’s argued that BT might pay significantly more.

Tony Ballard of Harbottle & Lewis, the law firm representing Vtesse, said:

"We believe it's fundamentally discriminatory for one company to be taxed at this massively higher rate. Unless a fairer means of taxing such companies emerges, there's going to be a diminution of enthusiasm among potential entrants to the market."

The case was lost at a Court of Appeal but will now be pushed upwards and onwards to the Supreme Court. Suffice to say that we believe the whole fibre tax needs to be reduced or cut entirely because it acts as an inhibitor to further investment in next generation networks.
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