Rating experts brand decision to challenge Court of Appeal’s judgement as “a kick in the teeth for retail”- just days before Christmas.
News has broken that the VOA, the government’s Valuation Office Agency is making an application to the Supreme Court to obtain a right of appeal to overturn last month’s defeat in the Court of Appeal over the long running £500 million dispute with major supermarkets* and ATM operators concerning business rates and ATM machines.
This action has been branded as a costly mistake by experts at Colliers International, the global real estate advisers and a “petulant action” that could result in a further two-year delay before the resolution of the case- if the Supreme Court agrees to hear the appeal. The rate payers (supermarkets) have 14 days to oppose this application but the Supreme Court is likely to take up to June 2019 to consider whether an appeal can proceed.
Last month 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 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.
This Court of Appeal’s ruling came as a massive relief, not only for the supermarkets involved, but also for the consumers who need access to these machines and would have suffered if the judgement went the other way and retailers ripped the ATMs out of their stores. If successful it could also have opened up the possibility of 430,000 sites of vending machines also attracting business rates.
Colliers had estimated around £500 million was at stake. Each ATM site would have attracted an average rates liability of around £4000. As the Appellants were successful, the refunds due to the supermarkets would be in the region of £496 million.
The Court of Appeal 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. It also refused the VOA's request for permission to appeal against its decision. This left the VOA 28 days to apply to the Supreme Court to apply for the right to appeal.
News that the VOA is challenging the Court of Appeal ruling by making an application to the Supreme Court is therefore massively disappointing. According to John Webber, Head of Business Rates at Colliers International, “Not only is this an enormous waste of tax payers’ money, but it will snatch away from hard pressed retailers the much- needed refunds they have been waiting for. If the appeal proceeds it will effectively paralyse the 2017 Rating List for food store operators and their concessions since the decision is unlikely to be given before the end of the 2017 Rating List in 2021. This is one of the most destructive and cavalier actions to retail jobs and public finance ever taken by public servants. It's just breath taking."
He continued, “It beggars belief that not only is the VOA continuing to flog this dead horse, but illustrates how out of touch it and the Government are when retailers are closing shops daily and jobs are being lost. Yet they continue to play fast and loose with public finances.”
“If anyone needed evidence that the Government isn’t listening to retail concerns- this action illustrates it.”
He added, “What we really need is for the VOA to get back in their box and instead of chasing the supermarkets, get on with dealing with the outstanding appeals, that have snarled up the system since the start of this case. We estimate that there are approximately 50,000 cases in the system concerned with the ATM business rates issue, that have not been dealt with and now we will only see further delays.
“The sad thing is that the zealots of the VOA who are the authors of this mess will be picking up their gold-plated pensions before this case is concluded while low paid retail workers are cast aside as shops close as a result of this action."
*Sainsburys Supermarket Ltd, Sainsbury’s Bank Plc, Cardtronics Europe Limited, Tesco Stores Ltd, Co-Operative Group Limited v Chris Sykes and Others (Valuation Officers).