Is Digital Britain to be taxed back to the copper age?
Computer Weekly has spent some time looking into the business rates that affect fibre networks, and has also uncovered plans that could see Wi-Fi hotspots and WiMAX networks having to pay tax backdated to 2005. BT Retail with some 600,000 home routers capable of acting as a hot-spot could face a bill of £29m a year.
Business rates on fibre networks are well known about in the industry, but the affect that these have had on the roll-out of unbundled networks and next generation access are considerable. The tax is charged at 48.5p in the pound, with the value being based on what the HM Revenue and Customs' Valuation Office Agency (VOA) estimates as the operating profit that the network owner could make if the fibre was rented to a third party and the length of the fibre is also taken into account. This means that even if you were in a situation where you had someone willing to put fibre in the ground for free, they would have to pay the tax, based on what the potential profit might be. These estimates could vary greatly and stand as a massive barrier to firms wanting to offer a fibre based service to businesses and homes. The UK and Ireland are the only two countries in the EU to have this tax.
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