Alex Holt, Partner and Head of TMT, KPMG in the UK comments on the increasing business rates following the Spring Budget.
Alex Holt, Partner and Head of TMT, KPMG in the UK, commented:
"The telecoms sector will be one of the hardest hit by the upcoming changes to business rates as the rateable valuations of infrastructure assets are reassessed. The industry is set to face a 42 per cent hike in business rates in the first year alone as a result. This factors in the annual limit of rate increases the Government sets for all businesses. But even with the caps, there will be little respite for the sector with further increases in the coming years.
"Telco providers need to be encouraged to boost spending on the ultra-fast infrastructure that the UK needs to stay competitive. The 30mbps upgrade, proposed by the House of Lords on Wednesday, will require significant financing from the private sector, but increasing rates threatens to stunt investment as the potential value of returns fall. The economics of this will not deliver equality across our cities, regions and rural areas.
"It's too early to forecast the potential impact of the rate reform on consumers. But it's inevitable that a proportion of these costs will trickle down in terms of wholesale charges, which could result in higher broadband prices."
Follow us on twitter: @kpmguk #SpringBudget
For further information please contact:
KPMG Press office
Tel: +44 (0) 207 694 8773
Dave Bertram, Citypress
Mobile: 07708 911622
KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 13,500 partners and staff. The UK firm recorded a revenue of £2.07 billion in the year ended 30 September 2016. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 152 countries and has 189,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.