Surprise at VOA’s tax proposals for next generation broadband
Br0kenTeleph0n3’s attention has been drawn to the new Valuation Office Agency proposals on how to tax next generation networks.
“It isn’t exactly what we thought it would be,” said the industry source, who has been closely involved in the discussions between the industry-led Broadband Stakeholders Group (BSG) and the VOA that have led to these proposals.
Indeed some may be astonished with VOA’s founding assumption: “NGA will be mainly the replacement of existing copper infrastructure”. As BT has been saying since forever, that is true only up to a point, that point being the street cabinet. Copper local loops will be with us for a long time yet.
The proposals are nothing if not complicated. As reported earlier, one of the proposals is that non-BT operators that service rural areas (the 33% of homes that BT says it won’t supply with NGA without state aid) will have their networks taxed on a receipts and expenditure basis, ie, like BT, namely on profits.
This is good news, as everyone knows that profit is an opinion while cash is reality. But the VOA says it all depends on it getting enough information from the market to be able to make a realistic assessment of the notional rental value of the link.
VOA apparently considers urban and rural residences to offer different rateable values. In town it’s either either £18 or £20 , depending on whether BT has unbundled the local loop. In the sticks it’s £2 , £6.50, £10 or £13 per end user, depending on “the factual data for each network”.
The VOA also says it will assess connections to large businesses and high bandwidth SMEs on their own merits, but there is no indication of the threshold for “high bandwidth”.
Please read the document. There is sure to be lots more important detail, but frankly, my eyes have glazed over.
Besides, as almost all the alternative operators have dropped out of the BDUK rural pilots, the entire issue now seems moot.