ATMs not liable for additional business rates

The Supreme Court has handed the retail sector a tax boost by upholding an earlier decision that cash machines are exempt from business rates and ending the long-running dispute with local shops as well as major supermarkets.

This month’s decision follows the appeal from the Government’s Valuation Office Agency against its defeat last year in the Court of Appeal that ruled that ATMs within existing properties – whether internal or external facing – should not be subject to separate business rates bills, instead falling within the property’s overall existing rates liability.  The decision paved the way for hundreds of millions of pounds of backdated refunds for the retail sector and confirmation that there would be no future tax demands.

The Valuation Office Agency had initially tried to make ATMs in supermarkets and local stores a separate ‘hereditament - in other words, a property to be valued.  This would mean that shops would have one valuation for business rates purposes and the ATM would have a separate one, for which the store would have to pay.  The total cost to supermarkets and other retail outlets with ATMs inside, like post offices and convenience stores, was estimated to have been £430 million.

Samantha Jones, an Associate Director and Retail specialist at Prop-Search said: “This is a landmark ruling from the Supreme Court which will have huge impact on the retail sector and will help maintain widespread access to cash.  It allows retailers to provide an essential financial service for local communities, without being taxed to do so, and it will give the industry a much needed sigh of relief during this time of uncertainty.”

“The Government now needs to implement the Supreme Court ruling by setting up a simple refund process which ensures full compensation is paid to all retailers who have been subject to wrongful business rates bills for ATMs.”

The original court case in this regard stems back 2013 when the VOA won a case which ruled that separate business rates should be charged on cash machines that had not previously impacted a store’s business rates bill.

Further information or advice can be obtained from Prop-Search - Tel: 01933 223300 / 01604 492000 or its website: www.prop-search.com