Retailers braced for decision on £400m cash machine tax appeal

Some of Britain’s biggest supermarkets will find out on Friday if they have have been successful in a long-running near-£400 million legal dispute over business rates paid on cash machines.

The Court of Appeal is set to hand down its judgment in a case brought against the Government by retail giants including Tesco, Sainsbury’s and the Co-operative Group, supported by independent cash machine operator Cardtronics Europe.

They are appealing after a ruling last year upheld a decision in 2013 that cash machines built into the front of a shop or petrol station should have a separate business rates bill.

It dashed retailer hopes of clawing back £200 million in rebates for past rates paid, while they are also facing a mammoth £181 million bill for the following four years under the recent revaluation.

The legal decision sparked fears that small shops and independent petrol forecourts may be forced to close ATMs or start charging for cash withdrawals.

It comes as access to cash dispensers has been dwindling amid a swathe of bank branch closures, with rural communities worst affected.

Robert Hayton, head of UK business rates at real estate adviser Altus Group, said: “If the decision is upheld, it is likely small shops will consider whether it is financially viable moving forward to offer free-to-use cash machines that are accessible from the outside of their store.

“The decision could deprive many communities of vital access to cash given the swathes of bank branch closures.”

Retailers were sent reeling after the 2013 decision by the Government to charge rates on “hole-in-the-wall” cash machines, which saw bills sent to thousands of retailers in 2014, backdated to the start of the last tax regime in April 2010.

Altus calculated that the average business rates bill for an ATM is £2,888 this year, but can be as much as £21,600 for a set of cash machines at a Tesco Metro in Liverpool.

Business rates from separate bills for cash machines will raise £44.5 million in rates tax this year across England and Wales and £181.3 million over the four-year life of the 2017 business rates regime, according to Altus.

While ATMs attached to retailers are having to pay rates, the regime does not apply to free-standing cash machines within stores.

But it still affects many thousands of hole-in-the-wall ATMs, with the number liable for business rates surging from 3,140 in 2010 to 15,422 this year.