Business rates tax on wi-fi and Wimax networks may be backdated to April 2005, potentially putting an intolerable strain on many community networks in rural areas that depend on them for broadband access, Computer Weekly has learned.
The Valuation Office Agency (VOA), which is responsible for rating non-domestic buildings, plant and equipment, known as the "heriditament", for business property taxes, is considering whether wi-fi and Wimax equipment should form part of the heriditament on which the tax is based.
If it turns out that they do, the tax could be backdated to the last time a rating was done, which was April 2005. The VOA has published a new general valuation for 2010 in draft form for comment and appeal.
Computer Weekly has learned that the VOA has suggested that wi-fi hotspots and Wimax networks be rated at £100 per access point. BT alone has 600,000 potential access points because BT Home wireless routers can be set to provide public access. This could rake in £29m a year for the government, and possibly a further £145m in back taxes.
Next-generation access tax
The VOA is also proposing to levy a £7.50 per year "next-generation access" tax on homes connected to new fibre networks. BT said recently it would increase the number of homes with fibre access to 2.5 million, potentially netting the government almost £19m a year.
The VOA said non-domestic rates were not a new tax, but applied to all non-domestic property. "There is no new windfall tax on Digital Britain," it said in a statement.
"Telecommunication installations have been subject to non-domestic rates for many years, this is nothing new. The figures you are quoting were used in proposals for new telecommunications infrastructure based on existing infrastructure values as a benchmark. They are not an addition to the rateable values of existing infrastructure that already reflects broadband connections.
"We are still in discussions with telecommunications operators including Broadband Stakeholders Group (BSG) to see what is fair and just. We would welcome input from other stakeholders."
The Community Broadband Network, which speaks for a number of rural and community networks, said, "Adding business rates to wireless broadband is not going to raise large sums from highly profitable publicly quoted companies that cherry-pick highly profitable areas. But it will add a burden to organisations prepared to deliver a community solution where no-one else has. Some of these rural areas may even lose their only source of broadband as a result of this proposal."