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UK NGA Property Tax Clarification
19 Aug 2010 | 09.51 Europe/London
The UK's Valuation Office Agency (VOA) has updated its valuation manuals to provide greater clarity on the property tax assessment of Next Generation Access (NGA) networks. Business properties are valued for property taxes and local authorities then charge annual taxes or Business Rates based on that valuation, typically the annual charge is £0.40 - 0.50 per £1 of rateable value. Historically the UK has regarded telecoms networks, electricity distribution systems and lit fibre optic cable as "property" for taxation purposes.
The VOA have chosen to adopt an approach based on that used for cable TV (CATV) networks which are valued at £7.50 per home passed. By assuming a take-up of 37.5% the VOA have arrived at an equivalent figure of £20 per home connected for NGA networks, with the intention of promoting investment by reducing the rates payable in early years when take-up may be lower. The annual charge to the network owner will be less than £10 ($15) with some reductions for small businesses.
Where the NGA system uses a BT copper loop, for example FTTC,there is a 10% reduction on the valuation to reflect the fact that the loop will already be incorporated in BT's rates assessment which is done on the basis of "Receipts and Expenditure".
Appendix A of the VOA manual, linked below, illustrates the charging for different scenarios including FTTH with both shared (GPON) fibre to the home and individual point to point fibre connections (PTP). Ducting and cabinets are included in the above "per home connected" figure and electronics fall outside the property valuation system.
The VOA are clearly leaving the door open for future revisions to the above valuation and methodology, stating that :-
[ VOA Manual Appendix A ]
The VOA have chosen to adopt an approach based on that used for cable TV (CATV) networks which are valued at £7.50 per home passed. By assuming a take-up of 37.5% the VOA have arrived at an equivalent figure of £20 per home connected for NGA networks, with the intention of promoting investment by reducing the rates payable in early years when take-up may be lower. The annual charge to the network owner will be less than £10 ($15) with some reductions for small businesses.
Where the NGA system uses a BT copper loop, for example FTTC,there is a 10% reduction on the valuation to reflect the fact that the loop will already be incorporated in BT's rates assessment which is done on the basis of "Receipts and Expenditure".
Appendix A of the VOA manual, linked below, illustrates the charging for different scenarios including FTTH with both shared (GPON) fibre to the home and individual point to point fibre connections (PTP). Ducting and cabinets are included in the above "per home connected" figure and electronics fall outside the property valuation system.
The VOA are clearly leaving the door open for future revisions to the above valuation and methodology, stating that :-
"If new evidence of rent or cost comes to light that indicated that £20RV/HC is incorrect or unreasonable, it can be taken into account. Similarly, once established a full receipts and expenditure method of valuation could be applied to next generation access networks, if no rental evidence is available."
[ VOA Manual Appendix A ]