Cash machine court ruling set to deliver £500m payout to big stores
Three of Britain’s biggest supermarket groups have won a legal victory worth up to £500m following a court battle over business rates on cash machines.
The court of appeal ruled yesterday that ATMs located on the inside and outside of stores should not be liable for additional business rates, which are a form of property tax on businesses.
Several big retailers including the Co-op, Sainsbury’s and Tesco had fought in the courts against the tax rules set by the Valuation Office Agency – the arm of HMRC responsible for setting business rates – which had claimed ATMs should be additionally assessed.
The verdict means the supermarket chains are in line for a windfall from tax refunds, which the property advisory company Colliers estimates will be jointly worth about £500m.
The case dates back to a 2013 decision by the government to charge rates on “hole-in-the-wall” cash machines, which was backdated to 2010.
Although the refund is small compared with the £1.8bn annual business rates liability for the four biggest supermarkets – Asda, Morrisons, Sainsbury’s and Tesco – it does however come at a time when retailers are facing growing pressure from online rivals who pay less money in tax.
A Co-op spokesperson suggested the victory would help the retailer keep cash machines at its stores.
“The case had threatened the viability of the ATM network and risked the future of much-needed banking services across communities.”
Banks have been heavily criticised by MPs for closing hundreds of branches in recent years, particularly in rural areas, and often leaving consumers with little option but to use cash machines that charge a fee.
Labour estimates that 60 bank branches and 250 free cash machines close each month, and has promised to ban ATM charges and to block closures of branches.
The appeal court refused to grant the Valuation Office leave to have the case heard in the supreme court, although it can petition for an appeal.