Money Matters
Tens of thousands of ATMS will close down if two quite different proposals go ahead. Cash machines are already disappearing at the rate of 500 a month as bank branches close and increasingly we use less cash. Any new ones opening are usually in city centres where there is already an oversupply: 80 per cent of free-to-use ATMS are within 300 metres of each other.
There are broadly two types of cash machine. Some are owned by banks in their branches and high-volume areas such as supermarkets. Others are stand-alone convenience ATMS run by independent providers who earn money each time you make a withdrawal; these are located in less populous places such as convenience stores, pubs, petrol stations and hospitals. Nearly all withdrawals on debit cards are free, though a few charge (usually around £1.50).
One attack on ATMS is coming from the Valuation Office Agency (VOA), which administers business rates. Its actions have left retailers with ATMS, such as supermarkets, not knowing if they can reclaim £300 million of business tax paid or face having to shell out an additional £5,000 in tax for every ATM they possess.
In 2013, retailers with ATMS outside their premises – hole-in-the-wall cash machines facing the street – were told to start paying business rates on the sites of these machines, in addition to the
business rates they already paid for their premises. They appealed but the decision was upheld last year.
Even though it won, the VOA also appealed; it now wants to tax ATMS on the inside as well. Supermarkets are fighting back. A decision following a Court of Appeal hearing is imminent but the losing side will most probably appeal to the Supreme Court. The issue will not be resolved for a long time. If the VOA wins, many shops will rip out their inside ATMS to avoid paying the extra tax. As many as 40,000 are at risk, and this could leave us where we were some years ago with the only free ATMS being hole-in-the-wall machines.
A VOA win would also have other ramifications. Business tax could then be argued to apply to shops’ internal vending machines, coffee machines and children’s rides.
The other attack on cash machines is a plan by Link, which oversees the ATM network, to slash their income. Each time you make a withdrawal, the machine operator earns 24p from your card issuer, unless that happens to be your own bank. This is how they subsidise free withdrawals. Link cut the fee last July from 25p and intended bringing it down to 20p over the next four years.
Independent operators warned they would have to close up to 30,000 cash machines as they became unprofitable. Link recently changed its mind to limit the impact. Next January’s cut will go ahead but the third has been cancelled and the fourth is under review.
To maintain a service for vulnerable cash-users living in remote areas, ATMS more than one kilometre from the next free cashpoint receive 30p. Inner-city dwellers have plenty of ATMS and are more likely to shop with debit cards than cash. Free cash machines for those living in rural areas, particularly older people, must be maintained at any cost.