BT threatens higher bills after rates rise
Telecom firms, tourist sites and football clubs among those hit by multi-million pound increase to bills
BT HAS warned that millions of customers’ broadband and telephone bills are likely to rise after it was hit by big increases in business rates.
Under the first revaluation for six years, BT’s rates will rise from £149 million a year to £343 million.
The company said it was “extremely disappointed” and called the new figure “excessive”. BT warned the rise was “highly likely” to “lead to higher prices for consumers and businesses”.
Business rates, based on rental values, have been reassessed by the Valuation Office Agency for the first time since 2008. Rising London rents have left some of the biggest companies facing significantly higher rates.
Tom Mockridge, chief executive of Virgin Media, whose rates have quadrupled, said: “The Chancellor, Philip Hammond, is choosing to sidestep responsibility for a huge increase in infrastructure taxes at the very moment after the Brexit vote that the UK needs to maximise investment into its digital fibre network.”
CONSUMERS are facing higher bills for their telephone and internet services after some of the country’s biggest providers were hit by major increases in their business rates.
Figures published yesterday by the Valuation Office Agency show the proposed new rates for thousands of businesses across the UK that will come into effect from April.
One of the biggest increases in rateable values is British Telecom, whose bill for England and Wales will jump from £149m to £714m next year, although for technical reasons it will only have to pay around half of the final amount. “It is highly likely that an increase of this size would lead to higher prices for consumers and businesses,” the telecoms giant said yesterday.
“We are extremely disappointed by the new rateable values that have been published today and which are clearly excessive,” it added. It warned that if the proposed new rates are brought in “it could have a negative impact on future investment in the network”.
Tom Mockridge, chief executive of Virgin Media, whose rates are quadrupling, said: “The Chancellor, Philip Hammond, is choosing to side-step responsibility for a huge increase in infrastructure taxes at the very moment after the Brexit vote the UK needs to maximise investment into its digital fibre network.”
Offices in the City of London and the capital’s prime retail streets were also hit particularly hard by the new rates, with a typical store on Regent Street seeing its rates increase 50pc from £1.029m to £1.54m.
London’s business rates bill will increase by an average of 11pc, and the “central rating list”, which contains major network properties such as gas, water, electricity distribution, telecoms and the railways, will increase by 28pc.
Businesses were dealt a blow on Wednesday when the Government announced that the transitional relief scheme, which will help companies phase in the bill increases, will not be as generous for large firms as first thought. Instead of a 12.5pc cap for increases in the first year, the cap for businesses with bills of more than £100,000 is now likely to be 45pc.
The figures showed that in the City of London the bill at a typical new office building will jump 5pc from £522,000 to £550,000 a year. For refurbished buildings, it will go from £240,000 to £321,000, a rise of 34pc.
Sadiq Khan, the Mayor of London, called for increases to be phased in more slowly, saying that the rises were “a real kick in the teeth”.
In England’s regions, many businesses will benefit from a fall in rates as the new figures aim to take into account a change in property values since the downturn. But the changes to the transitional relief system will also cap the amount of reduction that many businesses will see in the first year.
James Thompson, head of business rates at Deloitte Real Estate, said: “This comes as a blow to retailers operating in hard-hit high streets who had anticipated falls of over 50pc.”
Phil Vernon, head of rating at PwC, criticised the fact that businesses cannot appeal the new values until they come into effect in April and those appeal could take “several years”.