Local Government Finance Bill to bring £60million tax reform in a move to boost UK connectivity

Last week the DCLG (Department of Communities and Local Government) introduced in Parliament a Local Government Finance Bill offering full fibre infrastructure providers a £60million saving. This is part of the Government’s measures announced in the Autumn Statement, to boost UK digital connectivity. The Bill sets out the detail on a new 100% business rates relief on new full-fibre infrastructure for a 5-year period from 1 April 2017. This tax relief is designed to support the roll-out of full fibre to more homes and businesses and to “help get the UK ready for 5G???.

This new scheme will only apply to new full-fibre infrastructure (Fibre to the Home or to the Premise). Whilst welcomed by industry, existing infrastructure networks will still be subject to a fourfold rise in business rates, as announced last September by the Valuation Office Agency.

This tax-relief announcement is part of wider Government’s approach to focus on extending fibre networks across the UK and becoming a leader in 5G deployment. £400million public funding (to be matched by private finance) are to be invested in new fibre networks through the new Digital Infrastructure Fund. Recently, Government published a call for evidence on approaches to encourage the deployment of full fibre in local areas prior upcoming budget commitments in March.

Still to be announced is the long-awaited UK Digital Strategy, which would coordinate these measures around an overarching goal for the UK. The last few months has seen a number of initiatives; from plans to introduce a broadband universal service obligation of 10Mbit/s, to the review of the Electronic Communications Code aiming to address access and sharing of infrastructure issues, and lately the push towards more Fibre to the Home. A coordinated long-term vision would help provide additional certainty for the telecoms industry within the current cycle of investment.