They can moan all they want
There will simply be no money in the budget unless there will be a tax hike.
Rivals BT and Virgin Media have joined hands to collective moan that a forthcoming hike to business rates will result in tripling of their collective tax bill to £1.3bn over the next five years. The Valuation Office Agency‘s revaluation of business rates will come into force on 1 April 2017. But Virgin and BT complained the …
Oh dear mr council.
I'm very sorry, but owing to extra charges, we're having to increase the service provision costs for your premises by XYZ amount - which coincidentally is the same as you've just billed us.
We don't care.
We don't have to.
We're the phone company.
>Go on, say you'd be happy about it if it was your council tax...
It is everyone's Council Tax - and we will still endure cuts/austerity and the continuing collapse of social care despite it. Not happy but I know a further rise in local and national taxation is still required, though it probably won't happen as we're apparently 'having our cake and eating it'.
"and we will still endure cuts/austerity and the continuing collapse of social care despite it."
In some councils *ahem*Surrey*ahem* the amount of _documented_ fraud by contractors and staff is far higher than the proposed cuts, but manglement are busy trying to sweep that under the carpet instead of callling in the SFO.
That assumes the value of the property has gone up. When I started working at an ISP, a 2Mbps leased line went for £2,000/month. Now.. it doesn't. The value of lit fibre's linked to the value of the services that run across it, and the market price for services has fallen, not increased. Potential capacity has gone up, but that doesn't mean customers are going to be happy paying higher business rates or service charges for dark, lit or even 'dim' fibre. Especially as the market's pushed towards FTTC/FTTH provision.
Any tax based on a property value needs some form of "agreed value" as its base. This to avoid fluctuations in tax take and constant arguments about the instant value. When there is an election due it is politically expedient and all too easy to postpone the revaluation. When the process if finally undertaken the result is a vast hike. Those affected forget that they may have had several years underpaying. As property value can go down as well as up, a minority will have been underpaying.
For what it's worth one of the drivers for the change from domestic rates (a property tax) to the community charge (a personal tax - poll tax to some) was the pain of the great increases expected in ratable value. Ratable value was calculated according to some arcane formula base on the rent that may be obtained at some time in the past. Rates were neither fair nor transparent.
A little known factoid is that BT and Virgin have to pay business rates on the cables in the ground, the boxes at the end of the street and every Telegraph pole.
The value of that estate has gone up ralidly simply because of the value of Broadband in all its guises to the economy
The Mobile operators have to pay rates on their masts etc.
I only found out because it was discussed at a Council Meeting last October
So much for this revaluation being tax neutral.
See-
http://manuals.voa.gov.uk/corporate/publications/Manuals/RatingManual/RatingManualVolume5/sect871/rat-man-vol5-s871.html
Which includes fun elements like testing freshly laid fibre can attract a rate charge, and so can fibre that's switched off. Which can lead to issues around how to cease connections properly to avoid future charges. BT, Virgin, Kingston get a different metric based on number of subscribers, as well as rateable value assessed to infrastructure. But basically if you have dark fibre, rates are due on it from the entity that lights it, not the supplier. What it means in practice is explained in the Practice Note here-
http://manuals.voa.gov.uk/corporate/publications/Manuals/RatingManual/RatingManualVolume5/sect871/rat-man-vol5-s871-pn-Fibre-2017.html
It's going to cost them an extra 173 million per year (spread between the two of them) on top of the already fairly generous tax breaks they already get.
Don't lose sight of the fact that Business Rates (like Corporation Tax, utility bills and so on) are not really paid by the businesses themselves. The tax bill may be posted to them, but their only source of money is their customers who have to pay an increased amount for whatever the business is selling / doing. Similarly it is ultimately the customers who derive the benefit of any tax break; well maybe...
Not a huge amount of sympathy, and the amount they've already bumped line rental by should cover it.
Flying Pig Icon needed again...
Business Rates are paid to the local council. Since 2013 the councils have been able to retain up to 50% of the business rates collected, with the remainder going to government for redistribution as grants. It is the government's intent for "local government as a whole" to retain 100% of business rates by 2020.
http://www.local.gov.uk/business-rates
"it’s a backwards step to hike business rates"
Back in the 1950s it was quite common to have business tax rates in the 80-90% in western nations. However, your tax bill could be lowered by spending money in improving infrastructure (Which was the intent of higher taxes). In many cases (Not sure about the current UK tax code) you'd get a deduction of 1.1 Euros for every Euro spent on business expansion costs, and in many countries the ratio is higher. Beside, most tax codes also allow you to deduct the "retail" value of any improvements make, so they wouldn't even have to spend that much.
Its not like there isn't anything productive they could spend money on. They could spend a Billion Pounds on replacing all the corroding copper with fiber; replacing the broken antennas on cell phone towers; fixing their routers; investing in undersea links; anything really... And all that spent money will end up coming right back to them in the form of higher rates due to much higher speeds, more loyalty from customers, etc.
More than £1bn for faster UK broadband in autumn statement
Yes, yes it does.
"The Valuation Office Agency‘s revaluation of business rates will come into force on 1 April 2017. But Virgin and BT complained the new regime will mean a higher tax rate for their property plant and equipment assets, which could adversely affect their broadband investment plans."
Of course they'll raise the price of broadband for customers of offset this.
Of course they will. Anyone with even a basic knowledge of economics knows that companies don't really pay taxes. Taxes are just a part of the cost of doing business and in the end all such costs are paid for by the customer, and if costs get too out of line with what the company can charge it gets out of that business.