Coalition government decides not to review fibre tax

Darren Allan

It seems that the coalition government is reneging on a previous promise made to review the fibre tax, which smaller ISPs consider unfair to their business.

Minister for Communications, Culture and the Creative Industries (such a snappy title) Ed Vaizey back-tracked on the promised review, Computer Weekly reported.

Vaizey made the comment after a meeting with the Valuation Office Agency (VOA), when he stated there would be no tax review. Apparently a further clarifying statement will be issued soon.

The fibre tax favours companies with long cable runs, like BT, and smaller broadband providers who might require lots of shorter runs get hammered for more money.

Under the current VAO system, even a tiny length of connecting fibre is subject to a several grand tax charge – the first kilometre of any run is charged at this level. Hence the problem with lots of short lengths, which are hardly going to work out to be economically viable. BT is also favoured because it just gets charged for the whole rentable value of its cable, which indeed hardly seems fair.

We shall have to wait for the clarifying statement from the government to find out exactly what’s going on.

However, they can’t expect to be trumpeting the best broadband in Europe by 2015 in one breath, and then snatching away the fibre tax review and effectively the ability for smaller firms to move in and help expand the UK broadband market in the other. Oh wait, they’re the government. Of course they can, silly us.

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