Original article ISPreview UK:Read More
The Chief Financial Officer (CFO) of BT Group, Simon Lowth, has called on the UK government to “rethink” its proposed changes to UK business rates, which they warn could “risk a slowdown” in digital infrastructure (broadband and mobile) investment and lead to “higher bills” for consumers and businesses.
The issue centres on the Government’s major plan to abolish the notoriously complex Valuation Office Agency (VOA), which oversees how business rates are calculated, and shift its functions into HM Revenue & Customs (HMRC). In theory, this could be a positive move, especially if it results in a fairer and more transparent system for everybody, but the expectation is that business rates will remain an industry-wide bugbear.
The financial impact of this and related changes by the VOA on firms like BT (see below) is currently said to be “unknown“, and will depend on the outcome of ongoing discussions with the VOA, and on decisions taken at the next Budget on 26th November 2025. But BT’s CFO fears that the government’s plans may increase the tax on digital infrastructure and “threaten investment across a broad range of [other] infrastructure sectors“.
“Our in-depth analysis suggests that this reform could reduce business investment by £1.4 billion over five years, and permanently shrink the UK’s economy by £1.5 billion a year. That turns a supposedly revenue-neutral policy into one that actually costs the Government £600 million annually,” warned Lowth.
Simon Lowth, BT Group CFO, said:
“The VOA is currently revaluing every commercial property in the UK. This is a major concern to businesses of all sizes, as it has been argued that its approach can lack transparency and accountability. There is also a significant risk that the VOA takes decisions which stifle economic growth.
At the same time, the Government is also introducing a new reform charging a higher rate to businesses with properties and physical infrastructure valued over £500,000, which aims to fund lower tax rates for retail, hospitality, and leisure firms.
The goal was to get online giants to pay more while giving high street firms a much-needed break. But the reality is more complicated – with serious unintended consequences for the services that keep the country and the economy running.
These changes could instead result in a small number of UK infrastructure providers bearing a disproportionate level of the cost – potentially up to £400m between them each year. These are businesses investing in the energy, transport, and digital networks that underpin the economy and the country as a whole. Penalising them risks slowing investment in the fabric of the nation and the networks and services we need to fuel growth.
Meanwhile, large distribution warehouses – often associated with online tech giants – could end up contributing just £250 million a year between them. But that figure also includes warehouses used by haulage firms and UK retailers, meaning that tech giants may only pay a small portion of what is needed to properly support small businesses.
As a result, these reforms are unlikely to rebalance the system in favour of the high street. And more than that – the new business rates could become a tax on UK infrastructure, at a time when the country needs investment most.”
The remarks echo what BT’s CEO, Allison Kirkby, said last month when she warned against further increases in the country’s already high tax burden and specifically highlighted business rates (here). The risk is that, if the tax burden becomes too aggressive, then BT may shrink or slow some of its planned deployments and that could in turn impact the government’s own digital infrastructure targets (BT won’t be the only ones to react in such a way).
The catch is that BT is currently up against stiff competition in both the mobile and broadband sectors, thus any slowdown in their ambitions or scaling back might leave them at more of a competitive disadvantage in some areas. On the flip side the government is busy trying to make its public finances work without borrowing more and increasing the country’s already hefty debt mountain. But tax too much and investment may fall.
The UK’s public sector net debt was approximately 96.4% of Gross Domestic Product (GDP) in August 2025, and general government gross debt was 101.3% of GDP at the end of 2023. In other words, the total national debt is roughly the same as the country’s annual economic output. The UK has to pay interest on its national debt, with payments on central government debt reaching £8.4 billion in August 2025 alone.