WIRELESS BROADBAND

NON-DOMESTIC RATES

Valuation Office Agency

Presentation at BSG – 22 April 2013

Alan Roy Bradford MRICS Dip Rating

VOA – Who we are

VOA - Valuation Office Agency www.voa.gov.uk

Executive Agency of HMRC

Provides Valuations for:

Non-Domestic Rates (NDR)

Council Tax

Other Government Departments

Deals with appeals against NDR assessments

Aim of this Presentation

Dispel myths

Promote a better understanding

Engage with industry

Exchange information to develop robust

valuation policy and schemes of value

Explain NDR and how it relates to

Wireless Broadband infrastructure

Dispel Myths

Government policy – not VOA remit

VOA has no discretion – legislation/law

NDR – also called “Business Rates” It is

not a Broadband/Fibre/Wireless Tax

NDR – not applied to domestic property –

e.g. home wireless routers

The VOA does not make the value, it

follows market evidence

Non-Domestic Rates (NDR)

Primary Legislation LGFA 1988 + SI

Tax on the occupation of “Land” to fund local services

Unit of Assessment - Hereditament

Current Rating List – 2010

Based on Values at 1 April 2008 (AVD)

Revaluation – 2015 postponed to 2017

VOA assesses RV – Annual Rental Value

Billing Authorities calculate liability - RV x UBR (reliefs/transition)

NDR - Hereditament

Unit of assessment - physical contiguity *

Has to be Non-Domestic

Case Law - 4 Elements *

Actual occupation

Exclusive occupation

Beneficial – (Not only profit - social benefit)

Not too transient

*Subject to Empty Property Rates, Completion Notices, Central List etc.

NDR – Telecoms Rating

Telecom infrastructure is not exempt

RoT - Passive infrastructure is rateable

RoT - Active infrastructure is not rateable

A Hereditament is Fixed to “Land”

A Hereditament has to be “Occupied” *

Photons, electrons, spectrum is not

rateable but it may affect value of “Land”

NDR – Telecoms includes

Fibre optic networks (eg. Trunk and Core)

Copper networks (eg. Local Access)

Next Generation Access networks

Wireless/Broadcast/Mobile mast sites

Telephone kiosks etc.

Eg. BT, VM CATV, Mobile phone masts

NDR – Telecoms Practice Notes

VOA Practice Notes – on VOA website

Publications\Rating Manual\Volume 5

Section 860 – Mast sites (*Wireless BB?)

Section 870 – CATV Networks

Section 871 – Fibre Networks

Section 873 – Next Generation Access *

Live documents – changes as required

Wireless Broadband – Questions

What/How/Who/Where?

What is Wireless Broadband?

WiFi, WiMAX, LTE, NGA? Definitions?

How do they fit and interact?

How do they compete with fixed line?

Who “occupies” the infrastructure?

Are they “Domestic” or “Non-Domestic”?

Where are they?

What do they look like?

Wireless Broadband –

Valuation Questions

Cost of installation (Passive and Active)?

Rental payments for installation on land?

Benefits in kind? (Free Broadband)

Revenues from services?

Funding, grants?

Business plans?

The more we know the better we can value

NDR Wireless Broadband – Process

Investigations – involvement of operators

(through BSG and/or individually)

Obtain facts and evidence

Analyse and check

Develop Practice note

Clarify – Define – Value

Raise assessments (where appropriate)

NDR Wireless Broadband – Problems

Paramount Control – who is in “occupation”?

Domestic/Non-Domestic?

Ancillary or separate use to host premises?

Home Routers used as relay sites

WiFi in Coffee Shops, Hotels etc

Streetworks sites

Mesh networks – contiguity

Value (Urban/Rural areas)?

Current VOA Policy - WiFi

Domestic WiFi routers are not-rateable to NDR

Domestic WiFi routers used as wireless relay sites – borderline – benefit of the doubt - not rateable

WiFi in non-domestic premises - controlled by the Host premises occupier to enhance their occupation – eg. Coffee Shops, Hotels etc – value reflected in the Host assessment

Other rateable non-domestic WiFi sites, including streetworks WiFi installations separately assessed

Value £100 RV/WiFi site (subject to evidence and challenges)

Wireless Broadband – NDR Policy

Investigation, information gathering

Involve industry/operators

Define rateable/non-rateable infrastructure

Analysis of evidence

Produce Valuation Practice Note

Stand back and look - review

Publish Practice Note

Conclusion

Current Government policy is that non-domestic telecoms infrastructure is rateable – VOA has no discretion.

Engagement with Wireless Broadband operators is essential to produce a robust and fair valuation scheme.

VOA needs information/facts on which to base valuation policy and RVs.

VOA’s interpretation of rating law and valuations can be challenged on appeals.

Discussions and Questions

I cannot comment on:

The facts of individual cases

Government Policy

I cannot provide definitive answers without all the facts and time to consider them

I can comment on:

Rating principles and law

Valuation principles

The NDR process