The companies that paid the government billions of pounds for the licences of third generation mobile phones face an extra bill when fundamental changes take place to the assessment of telecommunications apparatus on October 1. And tax advisers KPMG warn that the new system will also mean administrative headaches for local authority tax collectors.

David O'Keeffe, Head of KPMG's Capital Allowance Consulting group, explains: 'The new non-domestic rating regulations take effect from 1 October. They will reverse the current situation where telecommunications apparatus and the site (for example masts, towers and aerials) where it is based are assessed separately for rating purposes and so apparatus users and site operators have separate bills.

Under the new system, the designated 'rateable occupier' of the site will be faced with the entire bill - and this includes those companies that have bought the new licences. Site operators will effectively be responsible for the rating obligations which are currently the liabilities of their tenants potentially requiring a massive re-charging exercise'

David adds: 'The government has promised transitional phasing of the new liabilities, but since the existing phasing rules whenever ratings assessments are split or merged are incredibly complex, these may not be the panacea they would seem. The new assessments are therefore likely to produce a nightmare billing scenario both for local authority tax collectors and for the ratepayers themselves who will be obliged to check the figures on their revised demand notices'.

And KPMG advises that the telecommunications changes are not the only business rates issue that companies should be aware of.

David O'Keeffe explains: 'The end of September also spells the final deadline for any business that wishes to appeal against their 2000 ratings valuation if they want to get it backdated to 1 April. Revaluations which take place every five years took effect from April 2000 and with the huge rise in property values since 1995, there is a good chance that many businesses will feel it is worth appealing against their much higher ratings valuation this year. But if they wish to do so, they'd be advised to get cracking and get it in this month.'

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.