First reading of Telecommunications Infrastructure Bill

The Telecommunications Infrastructure (relief from Non-Domestic rates) Bill 2017-2019 ("the Bill") passed its second reading debate in the House of Commons without any division on Monday 10 July 2017. MPs will next consider the Bill in a Committee of the Whole House on 5 September 2017.

The Bill aims to:

• Fulfil the announcement in the Autumn Statement 2016 to provide relief for five years for the installation of new optical fibre.
• Provide the framework for the relief; further conditions for eligibility are to be provided in regulations.

The provision of 100% business rates relief on investments in optical fibre aims to encourage the development of 5G mobile coverage and the move to ultrafast broadband. This 100% tax relief will apply for 5 years and will be backdated to 1 April 2017, it is expected to provide £60 million in support to telecoms companies who want to invest in their fibre network.

The chancellor had previously announced the tax relief for fibre optics in 2016’s autumn statement and it was due to be implemented in the Local Government Finance Bill, however following the general election and dissolution of Parliament on 3 May 2017, the Local Government Finance Bill fell and no further action was to be taken. As such it was thought that the tax relief would no longer be implemented. There was also no mention of the policy in the Queen's speech; however at the start of July it announced that the tax relief would be included in the Telecommunications Infrastructure bill instead. The tax relief is to complement the new £400m Digital Infrastructure Investment Fund, the fund went live on 3 July and is designed to support investment in full fibre broadband connections.

“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," said UK digital minister, Matt Hancock.

Whilst the relief works well for projects such as Virgin Media's £3bn Project Lightning network expansion and smaller alternative players such as CityFibre the older networks face huge increases in their tax bills. BT and Virgin Media have complained that the business rates revaluation in April was "unsound" and could trigger broadband price rises as well as being a barrier to investment in upgrades to older networks.

The Telecommunications Infrastructure (Relief from Non-Domestic Rates) Bill 2017-19 can be found here.