Communications service providers (CSPs) building full-fibre broadband networks will receive 100% relief on their business rates over five years, backdated to 1 April 2017 under new legislation introduced by the government.
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The government hopes that by removing multiple barriers to investment it will be able to incentivise CSPs to construct more fibre-to-the-premises (FTTP) infrastructure, delivering future-proofed, ultrafast browsing speeds to digitally demanding homes, and helping keep British businesses competitive after leaving the EU.
The tax holiday was first announced by Philip Hammond during the 2016 Autumn Statement – at the same time as the £400m Digital Infrastructure Investment Fund, which has now been re-announced at least twice – and is set to become law following the introduction of the Telecommunications Infrastructure Bill.
“We want Britain to remain the digital world leader that it is, and that means having the right infrastructure in place that will allow us keep up with the rapid advances in technology now and in the future,” said digital minister Matt Hancock, who has spearheaded the government’s U-turn on FTTP since he replaced Ed Vaizey at the Department for Digital, Culture, Media and Sport (DCMS) in July 2016.
“We want to see more commercial investment in the gold standard connectivity that full-fibre provides, and the 100% business rate relief and the Digital Infrastructure Investment Fund will provide a strong incentive for this,” he said.
“Regardless of where you live or work, we want everyone to benefit from access to the fast, affordable and reliable broadband they need to thrive,” said Marcus Jones, minister for local government.
“From making it easier to work from home to allowing digital businesses to flourish, our measures are creating the right conditions for more high-skilled, high-paid jobs of the future.”
The government believes the rate relief will provide £60m worth of support to CSPs investing in FTTP broadband over the five years to April 2022, down from its original estimate of £85m.
As previously reported by Computer Weekly, CSPs have been pressuring the government over business rates for well over a decade, making the argument that the existing system was biased in favour of Openreach.
The Conservatives had committed to reviewing the system prior to the 2010 general election but following a series of meetings, this promise never came to anything.
The bill, which had its first reading in the Commons on 4 July 2017, will shortly move forwards to a second reading before heading into committee.