Short-lived celebration of landmark ruling on ATM business rates

26 November 2018

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Retailers had been celebrating a victory after a Court of Appeal decision in November 2018 which deemed all ATMs to be non-rateable. Tesco, Sainsbury’s, the Co-0perative Group and others had appealed against the Valuation Office Agency decision to separately assess cash machines for business rates.

The Court of Appeal had decided that ATMs should not be separately rated, removing liability back to 2010. The decision had left retailers in line for hundreds of millions of pounds in business rates refunds and made the provision of free to use, ‘hole in the wall’ machines more financially viable.

The celebrations have been short-lived however. The Valuation Office Agency (VOA) has exercised its right to petition for an appeal. This has serious ramifications for the ratepayers as the verdict on the petition could take up to six months and if a right to appeal is allowed, it could be up to two years before the outcome is known.

Huw Jones, Associate Director with Cooke & Arkwright’s Business Rates department said, “The case law and legislation is fairly complex. Under the original proposals, fixed, external hole in the wall machines were rateable, whereas free standing internal ATMs as seen inside many shops, were not. The VOA’s intention is for all ATMs, including internal machines, to be liable for business rates. This could potentially open the door for other concessions such as lottery terminals, photo booths, vending machines and children’s rides, to be assessed, having ramifications for an already stressed retail sector.

“The Appeal Court decision to render all ATMs non rateable had been very good news for the high street and rural locations where ATMs have been lost at an alarming rate. Hopes that this trend would now abate are in jeopardy. According to the VOA website, there are circa 14,400 live, external ATM assessments in England and Wales with an average RV of £6,555. The Court of Appeal decision had meant that the average annual liability of £3,277.50 would be reduced to zero and refunds backdated to 2010.

“However, the refunds have now been stopped and retailers face months of uncertainty until the outcome of the petition is known. If allowed, the appeal could drag on for up to two years, something the retailers could well do without.”

Cooke & Arkwright have been providing rating valuation advice to The Welsh Rugby Union Limited (“WRU”) and Millennium Stadium plc for many years. They were recently successful in achieving substantial reductions in the assessments of the Millennium Stadium, covering both the 2005 and 2010 rating list. These negotiated reductions yielded savings of c.£3.5m which, crucially, allows the WRU to re-invest in rugby throughout Wales. They advise the WRU across the group portfolio including the National Centre of Excellence in the Vale of Glamorgan. The valuation issues across the WRU portfolio are complex requiring a high level of understanding of the funding and finances of professional sport in Wales. Cooke & Arkwright’s experience and understanding of these issues and application to the rating valuation have yielded these substantial negotiated reductions. The WRU and the Millennium Stadium entrust our work to organisations with the required levels in experience and expertise in dealing with these complex issues. I am glad to say we have this expertise in Wales. I would have no hesitation in recommending ratepayers making use of this Welsh based expertise.

Steve Phillips, Group Finance Director, Welsh Rugby Union Group