Procurement · 22 August 2018

Poor broadband coverage threatens digital tax transition for rural micro businesses

Self-employed people are twice as likely to work in rural areas than urban

The UK economy could soon see a boost of £9bn thanks to superfast broadband. But will micro businesses be able to make the most of it? The answer is “unlikely”, especially for those based in rural areas.

In March 2018, Brian Wilson, chair of directors at Rural England, suggested rural and micro business owners were already “strong digital adaptors”. But such companies are mostly unable to go digital due to a lack of skills, resources and connectivity.

“To help address these constraints and boost rural economic productivity, we believe there are some straight-forward ‘quick wins’, which if delivered locally, nationally and UK-wide, could have a significant and positive impact on the quality of life for rural communities and the UK economy as a whole,” he said.

Snapshot of a typical rural business

• Family-run and home-based
• Business owner over 55 years old
• Employ fewer than ten staff
• Less likely than an urban company to generate turnover above £50,000

These quick wins aren’t to be seen in the government’s latest Evaluation of the Economic Impact and Public Value of the Superfast Broadband Programme.

The scheme was announced in 2010/11 on the expectation that extension of superfast broadband coverage to remote areas would produce social and environmental benefits. Companies up and down the nation are set to reap the benefits. But institutions such as the Association of Independent Professionals and the Self Employed (IPSE) are unconvinced that rural businesses – micro ones especially – weren’t put at the heart of the scheme.

These are the companies that truly need attention, the IPSE claimed, calling on the government to double-down on its roll-out of broadband to rural areas to boost innovation and narrow the digital divide.

Of the 4.8 million self-employed workers, twice as many work in rural areas as in urban areas – and too many still don’t have access to a decent broadband connection.



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The UK’s smallest businesses are “incredibly dependent on fast, reliable broadband in order to operate, particularly as more people are choosing to work from home,” the IPSE said.

Its policy development manager, Jordan Marshall, added: “Poor connectivity acts as a lag on productivity, hindering individuals who might otherwise consider starting their own self-employed business.

“Business is becoming increasingly digitised, and we risk leaving people behind if the pace of the roll-out slows.

“The importance of reliable broadband has been highlighted by the government’s roll-out of ‘Making Tax Digital’. Business owners based in remote locations could really struggle to submit their tax returns if they don’t have adequate broadband. And in the post-Brexit landscape, the flexible labour market will be vital to the success of the UK economy.”

Superfast broadband for rural micro businesses is something that must not be overlooked.

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Shané Schutte is the deputy editor of Real Business, with a particular specialism in employment and business law, human resources, information technology and sales/marketing.

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