Heathrow-based companies launch group action against taxman on rates

More than 70 airport businesses based at Heathrow have brought a group action against the UK tax authorities in a bid to secure business rates reductions and are expected to discuss a settlement next week.

Cargo, freight and baggage handling firms are among companies based at the airport who have continued to face significant business rates payment throughout the pandemic despite a dive in passenger numbers.

In England and Wales, businesses providing handling services at airports are liable for full rates while counterparts in Scotland have been handed a 100% rates holiday.

The companies based at Heathrow, Europe’s busiest airport, have now launched the proceedings seeking “substantial and prolonged reductions” in the property tax.

It comes a day after Heathrow airport itself said it has started consulting with unions over pay cuts in a process which could lead to job losses due to low traffic numbers.

It is understood that real estate adviser Altus Group is advising the group of companies, having lodged two separate “group pre-challenge review” requests with the Valuation Office Agency arm of HMRC.

Settlement discussions are set to start on Monday September 7 regarding the first request, which relates to those operating on the periphery of the airport such as freight and cargo services.

A second request has been made which relates to airline services let out at the airport such as passenger lounges, baggage handling services and engineering bases.

If a settlement is not reached, the cases could move forward to an independent valuation tribunal.

Robert Hayton, head of business rates at Altus Group, said: “The requests are directly related to the substantial physical impact upon the property and its overall physical environment of numerous legislative, policy and associated matters introduced as a result of the Covid-19 pandemic both within the United Kingdom and wider.

“The impact that coronavirus has had on airports, as well as those businesses operating in and around the sites, are already obvious and grounds exist to support a substantial and prolonged reduction through the business rates system.”

John Holland-Kaye, chief executive of Heathrow Airport, has previously called the Government to match support for retailers with rate holidays with similar support for airports.

He recently told the Aviation Club: “Most countries get this … But once again it seems that our government has taken the opposite approach to the rest of the world.

“There has been no support for the aviation sector beyond the job retention scheme.

“While Tesco and Sainsbury’s have had their business rates waived for a year, airports have had no relief.”

HMRC has been contacted for a comment.