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UK Broadband Tax Breaks Aid Teleworkers

by Jason Gorringe,, London

11 December 2001

The government is urging UK businesses to take advantage of tax concessions on the cost of broadband connections installed between April 2000 and March 2003. This advice follows the rejection of a proposal from the Broadband Stakeholders Group (BSG) for more tax incentives in order to encourage investment in broadband infrastructure.

According to a report published recently by the Office of the e-Envoy, the tax breaks are available to smaller companies, including those installing connections in the homes of teleworkers, and could cut the bill for leased lines by around 20%.

Responding last week to the furore caused by the government's refusal to consider more tax breaks for the industry at present, E-commerce Minister Douglas Alexander explained: 'Too many people in the sector do not realise that there are a number of relevant initiatives, including tax relief on establishing and maintaining broadband connections, that also apply to employers paying for connections at employees' homes.'

As well as calling for more tax breaks, the BSG has also been campaigning for the government to make better use of the broadband services available itself, arguing that the guaranteed revenues provided by offering government services online could be the best way to create a sustainable broadband market.

The Chairman of Alcatel, Peter Radley, who is a prominent member of the BSG explained the Group's rationale: 'The government as customer, applying its buying power, is much more effective than any form of subsidy. Operators like the idea of seeing some sort of commitment from the government to buy their broadband services, because they can start to plan services based on operating expenses.'

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