Broadband bills set to rocket after business rate hike for internet providers
Costs of rolling out faster broadband nationwide mean internet companines are being hit by huge infrastucture bills - with the burdern likely to be passed onto their customers
BROADBAND customers face higher bills, it was warned last night – with business rates for some internet providers set to rocket fourfold.
Rates for around 2 million businesses in England and Wales were published yesterday, the first new calculations since 2008.
Internet companies were among the worst hit, because of the extra infrastructure needed to support the faster broadband speeds which the country so desperately needs.
Today it emerged BT’s annual business rate bill will jump from £165 million to £743 million from next April.
The broadband provider hit out at the “excessive” rates unveiled by government body The Valuation Office Agency.
It said it was “extremely disappointed”, adding: “It is highly likely than an increase of this size would lead to higher prices for consumers and businesses”.
BT, which is investing £6 billion in new infrastructure in the next three years, said it plans to appeal against the rate rises.
It added: “Stability is important for any business, so imposing a rateable value that is four times the current level is both unwelcome and unacceptable.”
Tom Mockridge, chief exec of rival Virgin Media, also hit out at the “huge increase in infrastructure taxes”.
A spokesman added it was a “kick in the cabinets” for broadband infrastructure builders, referring to the devices used in the network.
It can expect to see a similar fourfold increase to BT.
Business rates take into account a property’s value, the type of business, as well as relevant machinery and equipment.
Shops in London are also likely to be among the worst hit, particularly in the West End, raising fears they too could put up their prices to cover the extra cost.
Broadly, rates outside the capital are expected to drop.
Accountancy giant Deloitte has calculated the typical shop in London’s Regent Street will suffer a near 87 per cent hike in business rates
In the City, a typical refurbished office floor will see bills go up from £240,000 to £321,000, marking a 34 per cent rise.
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Sir Peter Rogers, chairman of the New West End Company, which represents businesses in central London main shopping streets said the rates would hit “retailer profits”.
He added they came “in a fragile post-Brexit economy” and could lead “to reduced investment and job losses around the UK.”
Deloitte’s calculations show that a typical shop in Manchester’s Trafford Centre will see its business rates drop from £173,00 to £170,000.
A large fitness and health club in Yorkshire will see its bill reduced to £195,000 from £198,000.