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Retailers don't need to pay business rates on ATMs, Court of Appeal rules

Out-Law News | 12 Nov 2018 | 4:04 pm | 1 min. read

The Court of Appeal (CoA) in the UK has found that cash machines outside retail premises should not be charged separate business rates for those ATMs in what one expert called "a victory for common sense".

The landmark ruling means that the UK government and local authorities will have to refund retailers hundreds of millions of pounds charged in England and Wales since the government decided it would treat ATMs as separate premises. The decision was made in 2013, but was backdated to 2010.

Property tax expert Richard Croker of Pinsent Masons, the law firm behind Out-Law.com, said: “It is a victory for common sense that a piece of the outside wall of a supermarket or a small area of floorspace in a convenience store is not a separate unit of property for rates purposes.

“The decision is good news for ATM users – as there was a fear that if the supermarkets lost, ATMs would be removed,” Croker said.

The CoA was ruling in an appeal brought by ATM operator Cardtronics and retailers Tesco, Sainsbury’s and the Co-op against a finding of the Upper Tribunal Lands Chamber. The tribunal decided that ATMs located in the external walls of supermarkets and other retailers and operated by a third party, such as a bank, should be treated as being on a separate property and therefore charged separate rates.

ATMs inside a supermarket were not affected by the tribunal’s decision in 2017.

The Valuation Office was refused leave to appeal the decision, although it can still petition for a hearing by the Supreme Court.

Business rates are charged on most non-domestic premises including shops, offices, warehouses and factories. Premises are assigned a rateable value by the Valuation Office, which had been treating the site of external ATMs as separate ‘hereditaments’ to the supermarket or retail premises in which the machines were located.