Rating experts concerned case could flood the already struggling appeals system and lead to stores ripping out their ATM machines
This week (on March 11th 2020), the Supreme Court will hear the appeal from the VOA, the government’s Valuation Office Agency against its defeat last year in the Court of Appeal concerning the long running dispute with major supermarkets* concerning business rates and ATM machines. According to rating experts at Colliers International, the global real estate advisers, if the hearing goes against the supermarkets, it could lead to stores ripping out their ATM machines, denying many in the local community free access to cash.
In November 2018, the Court of Appeal ruled that ATMs located both inside and outside of stores should NOT be assessed for additional business rates on top of the normal store rates costs, retailers are already facing. This decision overturned the ruling of the Upper Tribunal in January 2017 that made a distinction between ATMs inside a building and outside, and which had said that the sites of ATMs located within premises should not be assessed for business rates, but those ATM sites outside a shop or store should.
Although the Court of Appeal refused the VOA permission to appeal against its decision, in May 2019, the Supreme Court over ruled and allowed the VOA, this right of appeal, a decision branded as a costly “nightmare” by Colliers at the time.
Colliers estimated around £500 million is at stake. Each ATM site attracts an average rates liability of around £4000. If the Supreme Court upholds the Court of Appeal’s decision, the refunds due to the supermarkets would be in the region of £496 million. The Court of Appeal had also ruled that the VOA must lift the stay on all of the appeals that have snarled up the system for the duration of the case.
If the Supreme Court goes against the supermarkets and supports the VOA, Colliers believe the move will accelerate the closure of ATMs in stores across the country, as supermarkets rip them out of their stores to save on rates bills. Since the UK has lost thousands of ATMs since 2016, exacerbated by the closure of banks, such a decision will only accelerate this decline, bringing even further difficulties for those members of society that rely on them for free access for cash.
According to John Webber, Head of Business Rates at Colliers International, “We will monitor the forthcoming hearing with interest. Should the case go against the supermarkets it could snatch away from hard pressed retailers the much - needed refunds, they have been waiting for in this period of economic uncertainty. And even if the supermarkets are successful, they will have seen a two-year delay in receiving any refunds, which has not been helpful in the current economic climate. For the VOA a decision against them will not only be costly, but will also result in a flood of appeals that will over burden the already struggling CCA appeals system.”
Webber continued, “Whoever succeeds in the Supreme Court and whatever decision the Law Lords arrive at, common sense and a pragmatic approach needs to be taken- which in the world of business rates seems to be in short supply.
This case should not be a further reason for retail appeals to be delayed, particularly in the current climate with the headwinds all businesses are facing.”
*Sainsburys Supermarket Ltd, Sainsbury’s Bank Plc, Cardtronics Europe Limited, Tesco Stores Ltd, Co-Operative Group Limited v Chris Sykes and Others (Valuation Officers)