{"text_format":"1","workbook":"xlsx","n_sheets":4,"sheets":["Contents","Styles","TAF calculation","Average Tax rate"],"not_rendered":{"charts":0,"images":2,"macros":1,"external_links":1,"defined_names":73,"comments":0,"pivot_tables":0},"unopened":[],"bounds":{"document_bytes":16777216,"sheet_cells":100000,"rows_first":2000,"rows_last":500,"rows_between":2000,"halvings":0,"cell_chars":16384,"cell_head_chars":4096},"cells_cut":0,"cells_raw":0,"read":"whole","date_system":"1900"}

{"sheet":"Contents","index":0,"n_rows":18,"n_cols":3,"rows_kept":18,"cut":false,"hidden":false,"merged":[[11,1,11,2],[12,1,12,2],[13,1,13,2],[17,0,17,2]]}
[]
[null,null,"TAF calculation model"]
[]
["Information"]
[]
["Title ","TAF Calculation model"]
["Objective","Calculate Tax Adjustment Factor (TAF) for derivation of ALFs"]
["Confidentiality","Non-confidential Ofcom model"]
[]
["Contents"]
[]
["Worksheet","Description"]
["TAF calculation","Calculation of TAF"]
["Average tax rate","Calculates the average tax rate that produces the same TAF as that calculated in \"TAF calculation\" sheet"]
[]
["Terms and conditions"]
[]
["The terms and conditions on which OFCOM is making available this model are set out below.\n\nThe TAF calculation model ('the Model') has been developed to estimate the tax adjustment factor used as an input to estimating ALFs. The Model is provided as part of the explanation of OFCOM’s proposals in its consultation “Review of Annual Licence Fees”, dated 13 December 2024.\n\nWhile you may freely use the Model for the purposes for which it is provided, as set out in any accompanying model documentation, OFCOM does not guarantee that the Model will function when used in any modified way.\n\nNo representation or warranty is given as to the accuracy, completeness or correctness of the provided Model and it is provided 'as is'. It is provided without any representation or endorsement made and without warranty of any kind, whether express or implied, including but not limited to the implied warranties of satisfactory quality, fitness for a particular purpose, non-infringement, compatibility, security and accuracy.\n\nOFCOM does not accept any responsibility for any loss, disruption or damage to your data or your computer system which may occur whilst using the Model or material derived from the Model. OFCOM does not warrant that the functions contained in the Model will be uninterrupted or error free. Also, OFCOM does not warrant that defects will be corrected, or that the Model provided is free of viruses.\n\nIn no event will OFCOM be liable for any loss or damage including, without limitation, indirect or consequential loss or damage, or any loss or damages whatsoever arising from use or loss of use of, data or profits arising out of or in connection with the use or otherwise of the provided Model. By using the Model, you agree to the above."]

{"sheet":"Styles","index":1,"n_rows":41,"n_cols":5,"rows_kept":41,"cut":false,"hidden":false,"merged":[]}
[]
[]
[]
[]
["Styles"]
[]
[]
[null,"Input data",100,null,"Input data (e.g. RFS data, inflation, etc)"]
[]
[null,"Input assumption or parameter",100,null,"Input assumptions or parameters (e.g. for a scenario or control sheet)"]
[]
[null,"Feed internal",100,null,"Feed cell from within this workbook"]
[]
[null,"Feed external",100,null,"Feed cell from a different workbook"]
[]
[null,"Confidential",100,null,"Confidential data, to be removed or randomized before publication"]
[]
[null,"Randomized",100,null,"Randomized data"]
[]
[null,"Calculation",100,null,"Intermediate calculation (not final output)"]
[]
[null,"Model logic",100,null,"Cells required for model logic (e.g. year counters)"]
[]
[null,"Intentionally blank",null,null,"Cells left intentionally blank"]
[]
[null,"Output",100,null,"A key result from this part of the model (in particular one that will be used elsewhere in the model)"]
[]
[null,"Highlight",100,null,"A cell that is highlighted for uncertainty"]
[]
[null,"QA highlight",100,null,"A cell that is highlighted for quality assurance"]
[]
[null,"Check pass",true,null,"A side calculation intended solely to cross check a result (and which therefore should not be referenced anywhere else in the model)"]
[null,"Check fail",false]
[]
[null,"Note or source","Text",null,"Note/source"]
[]
[null,"Named range",null,null,"Cells which are part of a named range"]
[]
[null,"Name","named_range_1",null,"An Excel Name applying to one or more adjacent cells (use Insert Name Create to actually create the Excel Names)"]
[]
[null,"Un-format",null,null,"Going back to default Excel formatting"]

{"sheet":"TAF calculation","index":2,"n_rows":32,"n_cols":22,"rows_kept":32,"cut":false,"hidden":false,"merged":[]}
["Calculation of tax adjustment factor for ALF",null,null,null,null,null,null,null,null,null,null," "]
[]
["Input assumptions"]
[null,null,"Year 1","Year 2","Year 3","Year 4","Year 5","Year 6","Year 7","Year 8","Year 9","Year 10","Year 11","Year 12","Year 13","Year 14","Year 15","Year 16","Year 17","Year 18","Year 19","Year 20"]
["Real post tax discount rate",1.7000000000000001E-2]
["Main corporate tax rate",null,0.25,0.25,0.25,0.25,0.25,0.25,0.25,0.25,0.25,0.25,0.25,0.25,0.25,0.25,0.25,0.25,0.25,0.25,0.25,0.25]
["Duration of ALF calculation of 20 years ",20]
["Annual inflation assumption",0.02]
["Inflation index",null,1,{"$f":"C9*(1+$B$8)","v":1.02},1.0404,1.0612079999999999,1.08243216,1.1040808032,1.1261624192640001,1.14868566764928,1.1716593810022657,1.1950925686223111,1.2189944199947573,1.2433743083946525,1.2682417945625455,1.2936066304537963,1.3194787630628724,1.3458683383241299,1.3727857050906125,1.4002414191924248,1.4282462475762734,1.4568111725277988]
[]
["All in real terms. Payments assumed to occur at the beginning of the year."]
[]
["Run macro to calculate Tax Adjustment Factor if necessary"]
[]
[{"$f":"IF(ROUND(Check_TAF,5)=0,\"Currently no need to run macro\",\"NEED TO RUN MACRO\")","v":"Currently no need to run macro"}]
[]
[]
["This macro iteratively calculates the Tax Adjustment Factor, which reflect the more advantageous tax treatment of ALF compared to lump sum payments."]
["The macro hard codes the ALF figure assumed in the calculation of the tax adjustment factor."]
[]
["Calculation of Tax Adjustment Factor"]
[null,"PV","Year 1","Year 2","Year 3","Year 4","Year 5","Year 6","Year 7","Year 8","Year 9","Year 10","Year 11","Year 12","Year 13","Year 14","Year 15","Year 16","Year 17","Year 18","Year 19","Year 20"]
["Lump sum assumed for tax adjustment factor calculation",100]
["Lump sum value amortised (falls over time with inflation)",{"$f":"NPV($B$5,D24:V24)+C24","v":72.178778097280485},{"$f":"($B$23/$B$7)/C$9","v":5},4.9019607843137258,4.805843906189927,4.7116116727352226,4.6192271301325709,4.528654049149579,4.4398569109309598,4.3528008930695687,4.267451855950557,4.1837763293632912,4.1017414993757759,4.021315195466447,3.9424658779082811,3.8651626254002762,3.7893751229414465,3.7150736499425947,3.6422290685711713,3.5708128123246774,3.5007968748281151,3.4321537988510933]
["Tax benefits of amortisation of lump sum payment",{"$f":"NPV($B$5,D25:V25)+C25","v":18.044694524320121},{"$f":"C24*C$6","v":1.25},1.2254901960784315,1.2014609765474817,1.1779029181838057,1.1548067825331427,1.1321635122873948,1.1099642277327399,1.0882002232673922,1.0668629639876392,1.0459440823408228,1.025435374843944,1.0053287988666118,0.98561646947707027,0.96629065635006905,0.94734378073536163,0.92876841248564868,0.91055726714279284,0.89270320308116935,0.87519921870702877,0.85803844971277332]
[]
[{"$f":"A23","v":"Lump sum assumed for tax adjustment factor calculation"},{"$f":"B23","v":100}]
["Tax benefits for annual licence fees",{"$f":"NPV($B$5,D28:V28)+C28","v":27.318435158559957},{"$f":"C30*C$6","v":1.5956040375642337},1.5956040375642337,1.5956040375642337,1.5956040375642337,1.5956040375642337,1.5956040375642337,1.5956040375642337,1.5956040375642337,1.5956040375642337,1.5956040375642337,1.5956040375642337,1.5956040375642337,1.5956040375642337,1.5956040375642337,1.5956040375642337,1.5956040375642337,1.5956040375642337,1.5956040375642337,1.5956040375642337,1.5956040375642337]
["less Tax benefits of amortisation of lump sum payment",{"$f":"-B25","v":-18.044694524320121}]
["Annual licence fee ",{"$f":"NPV($B$5,D30:V30)+C30","v":109.27374063423983},6.382416150256935,{"$f":"ALF_for_TAF_calc","v":6.382416150256935},6.382416150256935,6.382416150256935,6.382416150256935,6.382416150256935,6.382416150256935,6.382416150256935,6.382416150256935,6.382416150256935,6.382416150256935,6.382416150256935,6.382416150256935,6.382416150256935,6.382416150256935,6.382416150256935,6.382416150256935,6.382416150256935,6.382416150256935,6.382416150256935]
["Tax Adjustment Factor",{"$f":"1+(B28+B29)/B27","v":1.0927374063423985}]
["Check=0",{"$f":"SUM(B27:B29)-B30","v":0}]

{"sheet":"Average Tax rate","index":3,"n_rows":29,"n_cols":22,"rows_kept":29,"cut":false,"hidden":false,"merged":[]}
["Calculation of Average Tax rate"]
[]
[]
["Run macro to calculate Average Tax rate if necessary"]
[]
[{"$f":"IF(ROUND(Check_Tax,5)=0,\"Currently no need to run macro\",\"NEED TO RUN MACRO\")","v":"Currently no need to run macro"}]
[]
[]
["Input assumptions"]
[]
["Real post tax discount rate",{"$f":"'TAF calculation'!B5","v":1.7000000000000001E-2}]
["Average corporate tax rate",0.25000001057348797]
["ALF annuity period (years)",{"$f":"'TAF calculation'!B7","v":20}]
["Annual inflation assumption",{"$f":"'TAF calculation'!B8","v":0.02}]
[]
[null,null,"Year 1","Year 2","Year 3","Year 4","Year 5","Year 6","Year 7","Year 8","Year 9","Year 10","Year 11","Year 12","Year 13","Year 14","Year 15","Year 16","Year 17","Year 18","Year 19","Year 20"]
["Inflation index",null,1,{"$f":"C17*(1+$B$14)","v":1.02},{"$f":"D17*(1+$B$14)","v":1.0404},1.0612079999999999,1.08243216,1.1040808032,1.1261624192640001,1.14868566764928,1.1716593810022657,1.1950925686223111,1.2189944199947573,1.2433743083946525,1.2682417945625455,1.2936066304537963,1.3194787630628724,1.3458683383241299,1.3727857050906125,1.4002414191924248,1.4282462475762734,1.4568111725277988]
[]
["Post tax NPV of lump sum payment (where lump sum payment = 100 in arbitary units)"]
[null,"PV","Year 1","Year 2","Year 3","Year 4","Year 5","Year 6","Year 7","Year 8","Year 9","Year 10","Year 11","Year 12","Year 13","Year 14","Year 15","Year 16","Year 17","Year 18","Year 19","Year 20"]
["Lump sum assumed for tax adjustment factor calculation",100]
["Amortisation of lump sum  (falls over time with inflation)",null,{"$f":"($B$21/$B$13)/C$17","v":5},{"$f":"($B$21/$B$13)/D$17","v":4.9019607843137258},4.805843906189927,4.7116116727352226,4.6192271301325709,4.528654049149579,4.4398569109309598,4.3528008930695687,4.267451855950557,4.1837763293632912,4.1017414993757759,4.021315195466447,3.9424658779082811,3.8651626254002762,3.7893751229414465,3.7150736499425947,3.6422290685711713,3.5708128123246774,3.5007968748281151,3.4321537988510933]
["PV of amortised lump sum",{"$f":"NPV($B$11,D22:V22)+C22","v":72.178778097280485}]
["PV of tax benefits of amortisation of lump sum payment",{"$f":"B23*B12","v":18.044695287501565}]
["lump sum payment, net of PV of tax benefit",{"$f":"B21-B24","v":81.955304712498432}]
[]
[]
["Tax Adjustment Factor (TAF)",{"$f":"B25/(B21*(1-B12))","v":1.0927374115720403}]
["Check=0",{"$f":"B28-TAF","v":5.2296418306951864E-9}]