By Altus Group | May 29, 2019

The Supreme Court last week confirmed that it will hear a Government agency’s appeal against a ruling that exempted cash machines from paying business rates delivering another hammer blow to the embattled retail sector.

The Court of Appeal ruled late last year that cash machines within existing properties – whether internal or external facing – should not be subject to separate business rates bills and instead fell within the overall property’s rates liability.

The decision paved the way for hundreds of millions of pounds of backdated refunds for the hard pressed retail sector and confirmation that there would be no future tax demands.

But retailers were dealt a massive blow before Christmas after hopes of an immediate tax stimulus worth £381.99 million to the sector through reimbursing erroneous bills going back to 1st April 2010 were dashed with the Government agency responsible for business rates petitioning the Supreme Court for leave to appeal paving the way for fresh tax demands to be sent out as appeals were stayed.

Councils across England and Wales then demanded another £46.70 million for the 2019/20 tax year which started on 1st April according to real estate adviser, Altus Group.

Robert Hayton, Head of U.K. Business Rates at Altus Group, points the finger squarely at how Councils are funded for the protracted legal dispute saying, “The amount to be rebated will place a heavy burden upon already stretched Council budgets which could risk local services so it is unsurprising the case will now be heard at the highest level albeit frustrating for retailers.”

Retailers were left reeling after a decision in 2013 to charge separate business rates on ‘hole in the wall’ cashpoints, which are classed as ‘non-rateable machinery’ and had not previously affected the store’s overall rates bill. Extra bills were then sent to thousands of retailers in 2014 backdated to April 2010.

The controversial change was triggered by an increasing reliance on property taxes by Councils in England who since 2012 have been able to keep 50% of any net increase in business rates as an incentive to support job creation.

This “localism” inspired cash strapped councils to identify additional rateable properties at the same time that the Valuation Office and grocers were in dispute over how cash machines should be assessed.

The number of cash machines being liable for business rates tax in England and Wales then surged from 3,140 in 2010 and now stands at 15,784 on 1st January 2019 according to Altus Group’s annual review.

Hayton says, “With permission granted for the Supreme Court to hear the case, realistically, the tax position could be tied up in costly litigation for upto 2 years denying retailers a much needed stimulus. It could also lead to retailers actually withdrawing facilities impeding access to cash as they seek to reduce their rates liabilities.”

In 2018, 757 bank branches closed leading to a heavy consumer dependency on ATM usage at local shops, supermarkets and petrol stations.

Hayton added, “Should the ruling be overturned, the Government would have to legislate. Cash machines drive footfall at a time the high street is struggling against internet shopping. Banks are closing branches and people are now facing an uphill battle to access their cash yet retailers continue to be penalised for picking up the slack and providing a vital service.”

Regional Breakdown Of £381.99 Million rebates as a result of Court of Appeal ruling. 



Bank Branches v Retail Sites. Where ATM’s are operated by the bank in which they are situated ie a bank branch they form a single assessment as the rateable occupier are one and the same body and were never subject to separate backdated bills. The situation with bank and building society branches is usually physically different, as the bank and the ATM are generally in the same occupation, part of the same property, provided for part of the same purpose, and operated by the same occupier who has total control commanding a single rating assessment and single bill.

In the Cardtronics litigation, they have facilities in secondary stores like Costcutter, Londis etc, but the other appeals being heard alongside Cardtronics relate to major supermarkets – Sainsburys, Tesco, Co-Op etc but those ATMs are often operated by Tesco Bank, Sainsburys Bank etc so not one and the same body.

Why Were New Bill Sent Out? The legal liability to pay business rates stems from the entry on the local Rating List. Councils have a duty to bill and collect the appropriate tax that follows from that entry and an appeal, whether or not stayed, does not negate payment of the commensurate tax liabilities. Councils are only in a position to rebate back and/or amend a bill once the entry on the local Rating List has been amended by the the Valuation Office Agency.


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