Business Rates Bill

British Telecommunications PLC
18 October 2000




          BT SAVES MILLIONS ON BUSINESS RATES BILL
                              
BT is to receive a £250 million refund following a five-year

legal battle to reduce its local government business rates

bills in England and Wales. It has reached agreement after

challenging the valuations on which it was charged for its

network assets.

  The agreement also covers future business rates. BT will

next year pay £100 million less than its current £310

million rates bill for its network assets in England and

Wales.

  A settlement was reached with the Valuation Office Agency

on the eve of a Lands Tribunal hearing over how rateable

values have been applied since April 1995. The outcome,

which follows lengthy and complex negotiations, is the

culmination of a process which started in 1995 when the

Government granted BT the right to a conventional rates

assessment, bringing it into line with other private sector

businesses. Until then the rateable value for the network

was set by the Government, with no right of appeal.

  David Malone, BT Property's head of rating, said: 'This

is an excellent result for BT and its shareholders. I am

very pleased that BT's negotiations with the Valuation

Office Agency have reached a mutually acceptable outcome.'

      It is hoped that appeals by BT Property against

similar assessments in Scotland and Northern Ireland will

now be able to be resolved.


Note to editors:

The network assets on which BT pays rates comprise:

* the street network of ducts, poles and cables in the

  access and core network including street cabinets,

  footway boxes and manholes

* telephone kiosks

* telephone exchange and repeater station buildings; and

* microwave radio and satellite earth stations.

  The case did not cover rating valuations on other BT

properties such as offices and shops. Traditionally these

have been assessed in the conventional way.

  The settlement means that the rateable value of £523

million, which had been applied annually in England from

April 1, 1995 to March 31, 2000 is reduced to an initial

figure of £445 million, falling annually to £347 million by

April 1, 1999.

     The rateable value effective from April 1, 2000, which

stands at £862 million following the current rating

revaluation, now reduces to £467 million. A framework has

also been agreed for subsequent years. Similar percentage

reductions have been achieved in Wales.