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Business Rates Relief for New Fibre Roll-Out

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Following much lobbying of government by communication providers (CPs) on the significant business rate cost attached to new infrastructure roll-out, the Chancellor, Philip Hammond, announced in his 2016 Autumn Statement a plan to invest £1b+ in new fibre network roll-out and support for mobile 5G. Part of this investment plan involves providing business rates relief for new fibre roll-out that will be implemented via the new Local Government and Finance Bill.

Although there is little detail on the eligibility criteria in the proposed bill, the 100% rates relief for any new fibre roll-out is advertised to last for the whole of the 2017 Rating List. Further we understand it will apply to new fibre to the premises or home only that is installed from 1 April 2017 onwards. Consequently it will not be retrospective and will therefore probably exclude BT’s current roll-out model of mainly taking fibre to the cabinet.

Any relief will expire at the end of the 2017 Rating List and so from April 2022 CPs will incur rates liability on any new fibre roll-out, so will need to account for this future expense.

What is also of concern is the estimate of what this relief will equate to over the 5 years. According to an article in ISPreview (by Mark Jackson 13 January 2013), the Communities Secretary, Sajid Javid, has indicated that this scheme will “offer a £60m boost to deliver ever faster broadband connections”.

This may sound like a significant sum but with Virgin Media, City Fibre and probably BT having significant roll out plans for new fibre to the premises or home, the £60m estimate is either a massive underestimate or the eligibility criteria will be far more restrictive than envisaged.