Supermarkets & small shops launch legal action against additional ATM business rates charge

Around 10,000 cash machines at supermarkets and small shops risk being shut down in legal battle over business rates.

The businesses are locked in a high-stakes fight over whether ATMs owned by a shop should pay additional rates.

A ruling is expected by the Court of Appeal within weeks – and if it backs the Valuation Office Agency (VOA) which oversees business rates, then thousands of cash machines could become unprofitable and shut down.

At at time when many banks are closing branches across the country cash machines at supermarkets and small shops are one of the only ways consumers are able to access cash and these now risk being shut down in the courtroom battle over business rates.

But if the supermarkets win, then the VOA will have to cough up nearly £500m in back taxes covering 15,500 machines, according to research by consultant Colliers International.

John Webber of Colliers said: ‘We hope the courts see sense. If the VOA gets its way at the Court of Appeal, there is no doubt many big stores would be ripping ATMs out of their stores to avoid the extra business rate tax bill. Ultimately, it will be the consumer that suffers.’

If a shopkeeper has a hole-in the-wall ATM facing out onto the street, this is treated as a separate premises to the store and charged its own business rate.

But internal cash machines, and external ones facing land belonging to the business such as a supermarket car park, do not pay separate rates.

If a shopkeeper has a hole-in the-wall ATM facing out onto the street, this is treated as a separate premises to the store and charged its own business rate

Big supermarkets have been locked in a five-year battle with the VOA over whether these rules are correct and a ruling from the Court of Appeal is due soon.

If the VOA loses it will mean that no cash machines should ever have been paying business rates and authorities will have to refund up to £496million in wrongly-collected tax.

But if it wins, it keeps this cash and is able to collect £4,000 for 10,000 extra machines every year – £40million in total.

Firms are set to pay a total of £30.8billion in business rates this year, and it is feared the burden is so great many will have to shut down.

Whoever loses the case is likely to appeal to the Supreme Court. 

In the meantime, Webber said, a £300million backlog of unpaid business rate refunds has built up.

The VOA said: ‘Both parties appealed to the Court of Appeal to obtain legal clarity on what should be taken into account when determining whether a property should be the subject of a separate assessment.’ 

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