BT Group PLC (LSE:BT.A) stock got a boost today after the Chancellor of the Exchequer confirmed tax incentives that the telecommunications company's boss Philip Jansen said were vital for UK businesses.
The chief executive of BT last week flagged how the company was committed to deploying full-fibre broadband across the UK and saying making the incentive permanent would be a "real game-changer".
Jansen said in a statement last Thursday that companies like BT would be given security if the chancellor pledged long-term certainty for businesses through such tax incentives.
In today's autumn statement, Jeremy Hunt confirmed that the 'super deduction' to incentivise capital investment would indeed now be made permanent.
The incentive scheme, which was introduced in 2021 and then extended to a three-year period in this year's spring Budget, with businesses allowed to write off the full cost of qualifying investment in plant and machinery, would be "the biggest business tax cut in modern British history", Hunt told the House of Commons.
The expensing scheme is expected to be worth over £10 billion each year to UK companies, with the Office of Budgetary Responsibility expecting the scheme will unlock an additional £14 billion of investment over the forecast period.
In the statement last week, Jansen said that BT's board has made £15 billion of long-term commitments towards building out the full fibre broadband network, in the knowledge that returns may be some way off.
With the certainty of the tax ‘super deduction’ scheme for infrastructure investors from April 2021, BT increased and accelerated its fibre rollout targets, from 20 million to 25 million homes.
“The real game-changer would be to put these tax incentives on a permanent basis,” Jansen said.
“That would give businesses like BT Group genuine long-term certainty to plan and shift the investment environment in Britain from good to great. I know the Chancellor is considering this as one option for next week’s Autumn statement.”
BT Group’s shares rose over 5% to 126p during Hunt's speech, a four-month high, but eased off to 122.55p by late afternoon, a gain of 3.8%.