BT says 'super deduction' will significantly cut tax bill

FILE PHOTO: People enter British Telecom (BT) headquarters in London, Britain, November 15, 2019. REUTERS/Simon Dawson

LONDON (Reuters) - BT, Britain’s biggest broadband and mobile provider, said the “super deduction” tax break for investment announced by the government on Wednesday would significantly cut its tax bill for several years.

BT is spending billions of pounds in building fibre broadband connections to homes and businesses, and extending its 5G mobile network.

Its shares closed 6.7% higher on Wednesday.

“We are expecting to invest significant amounts of capex in plant and machinery over the next several years, and to the extent this proves to be eligible for the super-deduction it could result in a significant reduction in our corporation tax bill for our 2021/22 and 2022/23 financial years,” a spokesman said.

“This would be offset in later years by the subsequent increase in the corporation tax rate to 25% from April 2023.”

Reporting by Paul Sandle; Editing by Cynthia Osterman