Digital Britain minister seeks Valuation Office Agency meeting over fibre business rates

The government is seeking a meeting with the Valuation Office Agency (VOA) to discuss how business rates create a barrier to investment in next generation broadband networks.

The government is seeking a meeting with the Valuation Office Agency (VOA) to discuss how business rates create a barrier to investment in next generation broadband networks.

Digital Britain minister Ed Vaizey told Computer Weekly, "A meeting with the VOA within the next three months would be most helpful."

The agency sets the rate that small network operators must pay to light fibre cables, which are widely held to favour BT and the larger network operators.

In a dissenting opinion in judgement in Vtesse Networks v Valuation Office Agency, Lord Justice Sedley said, "It is now evident that there is arguably a gross disparity in BT's favour between the rateable value of its and Vtesse's cables."

Before the election, the Conservatives promised an urgent review of business rates and their effect on network investment. It said at the time that private sector investors should not be disadvantaged compared with BT and other large-scale operators in terms of the business rates applied to fibre networks.

"Currently smaller fibre networks pay disproportionately more than larger networks. As such it harms the business case for smaller operators to build local networks and favours larger incumbent operators," the Conservatives said.

Vaizey said no-one had been able to tell him exactly how much money the government makes from business rates on fibre. "But it runs to hundred of millions a year," he said.

Computer Weekly has also been unable to establish the government's take from business rates on fibre, despite asking the Treasury, the Department of Communities and Local Government (through which local councils levy and collect the tax), and the VOA itself.

BT, Virgin Media and Cable & Wireless are each treated differently by the VOA for business rates. BT is rated on its entire physical infrastructure using its profit figure, Virgin Media on homes passed.

Smaller network operators pay per lit kilometre of fibre, with shorter networks paying vastly more than longer ones.

Speaking at the Broadband Delivery UK Industry Day, culture minister Jeremy Hunt said the revamp of business rates would have to be "revenue neutral with respect to the Treasury", but fairer to network operators.

BT's rateable value 2005-2010

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