Supermarkets win ruling against HMRC over bank machines
Three of Britain’s biggest supermarket groups have won a legal victory worth up to £500m, following a court battle over business rates on cash machines installed at their shops.
The court of appeal ruled on Friday that cash machines located both inside and outside stores should not be liable for additional business rates, which are a form of property tax on businesses collected by the government.
Several retailers including Tesco, Sainsbury’s and the Co-op had fought in the courts against the tax rules set by the Valuation Office Agency – the arm of HM Revenue and Customs responsible for setting business rates – which had claimed that ATMs should be additionally assessed.
The court verdict means the supermarket chains are in line for a multimillion pound windfall from tax refunds, which the property advisory company Colliers estimates is worth about £500m.
The case dates back to a 2013 decision by the government to charge rates on “hole-in-the-wall” cash machines, which was backdated to 2010.
Although the refund is small compared to the £1.8bn annual business rates liability for the four biggest supermarket firms – Tesco, Sainsbury’s, Asda and Morrisons – it does however come at a time when high street retailers are facing growing pressure from online rivals who pay less in tax.
A spokesperson for the Co-op suggested that the victory would help it keep cash machines at its stores, helping people who rely on them as high street banks shut branches up and down the country.
“The case had threatened the viability of the ATM network and risked the future of much-needed banking services across communities.”
Banks have been heavily criticised by MPs for closing hundreds of branches in recent years, particularly in rural areas, and often leaving consumers with little option but to use supermarket cash machines or ATMs that charge a fee.
Labour estimates that 60 bank branches and 250 free cash machines close every month, and has promised to ban ATM charges and block branch closures to help rejuvenate high streets.
The court of appeal refused to grant the Valuation Office leave to have the case heard in the supreme court, although it can petition for an appeal.
A spokesperson for the agency said: “We are considering the implications of the court of appeal decisions.”
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