The European Commission has announced that it has instigated an investigation
into possible illegal state aid from the UK government to BT. The aid is believed
to have been granted to the telecoms giant through certain tax benefits relating
to property and the sums in question are in their billions. The formal enquiry
will study the property tax in question and the asset valuation method which
is applied to BT when calculating this to assess whether this benefits BT compared
to its competitors. When it comes to state aid through tax benefits this may
be allowed where the differential treatment is justified by the inherent character
and logic of the tax system.

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