The Court of Appeal has ruled that ATMs located both inside and outside of stores should not be assessed for additional business rates to halt the Valuation Office Agency’s (VOA) proposal to introduce additional rates on all machines.
The case, brought by supermarkets Sainsbury’s, Tesco and The Co-Operative Group alongside ATM provider Cardtronics Europe, overturns the ruling of the Upper Tribunal in January 2017 that made a distinction between ATMs inside a building and out. That ruling stated that the sites of ATMs located within premises should not be assessed for business rates, but those ATM sites outside a shop or store should.
According to Colliers International the decision will result in refunds to the grocery retailers of around of £496m with the verdict backdated. Retailers will now not be required to pay additional business rates on ATMs on top of the normal store rates costs.
In addition, the Court of Appeal has ruled that the VOA must lift the stay on all of the appeals that have been held up in the system while the case has been ongoing. It is estimated that there are approximately 50,000 cases in the system concerned with ATM business rates issue.
The VOA has asked for permission to appeal against the decision but was refused by the Court of Appeal. The government agency now has 28 days to apply to the Supreme Court to obtain the right to appeal.
John Webber, head of business rates at Colliers International, said: “We are delighted the Courts saw sense. The one fly in the ointment would be if the Supreme Court allowed the VOA to appeal further. We hope no further taxpayers’ money is wasted in pursuing this unnecessary and unfair claim. “
“There was a real fear that if the VOA had been successful this would have opened up the floodgates to assess up to 400,000 vending operations which would have been calamitous for both retailers and those operators. Hopefully, this puts the VOA zealots back in the box and they get on with dealing with the outstanding appeals instead of cooking the golden goose named retail. ”
Bryan Johnston, real estate litigation partner at Dentons who acted for Sainsbury’s and Co-op on the case, added that it was a “decisive and pragmatic judgment” that “ensures that the VOA cannot create fiscal alchemy by separately rating portfolios of ATM machines”.
The ruling comes two weeks after the government introduced a one-third cut in business rates that will take effect for two years from April 2019 until the next revaluation in 2021. The estimated £900m in business rates relief will be available for nearly 500,000 small businesses in England that have a rateable value of £51,000 or less.