Fibre tax relief wandering its way through House of Commons
Companies have been campaigning for changes to how fibre is taxed through the business rates and with a new bill that is stepping through its many stages in the House of Commons and House of Lords there is the chance that new fibre roll-outs will be zero rated and therefore encourage lots more roll-out. The second reading of the bill was on 10th July and parliamentlive.tv will let you watch the debate and also the many various questions raised about the USO and superfast broadband roll-outs.
The debate revealed that later in the year we can expect more business broadband vouchers but only for full fibre connectivity, which will prove popular with firms like CityFibre and Venus but if Openreach can make its Fibre on Demand service easier to order and install they might also see lots of vouchers.
Business rates for existing fibre networks undertook a massive blow with the Valuation Office Agency which saw from 1st April 2017 a big rise in existing rates tripling the existing fibre networks for Virgin Media and BT Group and others are also affected.
So what is the new bill proposing, essentially that new fibre will for a period of five years get 100% relief from business rates and that the five period will be reviewed so therefore might be extended.
A five year tax holiday will be very useful for new roll-outs, but critically there is no guarantee on where these roll-outs will be, so we may see some areas in 2018 simple having more ultrafast broadband options while the less popular areas of towns, cities and rural areas will be reliant on the Universal Service Obligation.
Encouraging a bigger full fibre roll-out is great, but businesses will be looking at the potential costs after the five year period, since if you roll-out a massive network once the rates go back to their usual figures there is potential for firms to go out of business. If the Government was to really want to get a massive segment of the UK wired up with full fibre we would be debating business rates relief for periods of ten to fifteen years and maybe even longer for rural areas. The problem with longer than five years is that this goes beyond the expected lifetime of the existing Parliament and thus would probably only be feasible with massive cross party support.