Press release

£60 million tax reform to boost UK's digital revolution

The UK’s digital revolution is set to benefit from a multi-million pound boost, under plans announced by Communities Secretary Sajid Javid.

broadband

A new Local Government Finance Bill published today (13 January 2017) will make it easier for companies to connect more homes and businesses across England to gold standard full fibre broadband and help get the UK ready for 5G by cutting the cost of laying the cables.

Currently telecoms networks pay business rates on the fibre infrastructure needed to deliver high quality broadband and mobile connectivity to their customers. The Bill introduced in Parliament will give these companies a tax break for up to 5 years on the new infrastructure they lay for full fibre broadband – a saving of £60 million, which can be reinvested in this work.

This new tax relief will not apply to existing infrastructure, giving companies an added incentive to move further and faster to get people connected to the best possible services as they become available.

The move is part of a £1 billion package of measures by the government, announced at Autumn Statement 2016, to help communities get digitally connected. The package also includes:

  • a £400 million Digital Infrastructure Investment Fund, at least matched by private finance, to invest in new fibre networks over the next 4 years
  • £740million funding to encourage the market development of full fibre networks in both urban and rural areas
  • a coordinated programme of integrated fibre and 5G trials, to keep the UK at the forefront of the digital revolution

Communities Secretary Sajid Javid said:

We need to have the best possible digital technology and broadband connections if we’re to create an economy that works for all.

The Local Government Finance Bill will offer a £60 million boost to deliver ever-faster broadband connections, making UK PLC an ever-stronger competitor on the global stage.

Supporting local economic growth – in communities and online

The government is determined to create an economy that works for everyone, by giving councils and communities the powers they need to boost local economic growth.

The Local Government Finance Bill includes a range of measures to cut business rates for small businesses and local amenities and help local communities to thrive.

They include:

  • bringing rural rate reliefs into line with those in urban areas – currently, eligible small businesses in rural areas benefit from a 50% discount on their business rates. The Bill will double this, bringing it into line with rate reliefs in urban areas
  • rate reliefs on public toilets – councils are currently required to charge themselves business rates on the public toilets they are responsible for, and cannot grant themselves any rate reliefs. This Bill will change that, and allow councils to provide rate relief to all public toilets, making it cheaper for councils to keep them open in their areas.

This is on top of the biggest ever cut in business rates announced at the Budget – worth £6.7 billion over the next 5 years – which means 600,000 small businesses will never have to pay business rates again.

The Bill also lays the groundwork for historic reform to business rates so that, by 2020, local government will keep 100% of the business rates it collects.

From April 2017, this new approach will be piloted in London, Manchester and Liverpool, as well as the devolution deal areas of the West of England, Cornwall and the West Midlands.

This is a change local government has campaigned for, for years – and will put councils firmly at the heart of efforts to drive local economic growth, encouraging them to further support local firms and jobs and, in turn, ensure their communities see the benefits of increased local economic growth.

Further information

Full-fibre broadband helps people to share ever-more digital content faster, stream ultra-HD TV without buffering, and use virtual reality. It’s also more reliable and secure than traditional copper internet cables, so businesses and consumers will always have internet access when they need it.

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Published 13 January 2017