Slash our business rates, say telecoms operators

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Telecoms firms are demanding a huge reduction in their business rates that could see the Treasury £250m out of pocket.

With three months to go until the five-yearly review of business rates begins, telecoms companies operating in the UK are urging the Government to introduce a new system for assessing their bills.

As well as being taxed on their property, the companies have to pay rates on their networks. The last valuation was conducted at the peak of the telecoms boom and, collectively, the firms pay around £500m in rates.

But the operators have asked e-commerce minister Stephen Timms to consider alternative ways of assessing rates that would bring an end to the large swings in their bills between reviews.

The companies have also argued that they are due for a big reduction in their bills because of the severe downturn in the telecoms market.

On top of this, a group of telecoms operators - including Cable & Wireless, Global Crossing and Energis - is calling for an end to an anomaly which means BT's rates are assessed in a different way to those of all other companies.

The telecoms operators, represented by trade body the UKCTA, have warned the Government that the rating system could undermine attempts to roll out broadband internet access across the UK. The group has also pointed out that telecoms companies in other European countries don't pay rates on their networks.

While the UK telecoms companies have received a sympathetic hearing from Mr Timms, the department with responsibility for rates, the Office of the Deputy Prime Minister, is understood to have taken a dimmer view of the proposals.

Dougald Robinson, the head of regulatory affairs at Global Crossing and a board director of the UKCTA, said: "We hope that the Government removes the uncertainty and risk created by the rates."