News that the Supreme Court has agreed to allow the VOA, the government’s Valuation Office Agency the right of appeal against last year’s defeat in the Court of Appeal over the long running dispute with major supermarkets* concerning business rates and ATM machines, has been branded as a costly “nightmare” by experts at Colliers International, the global real estate advisers, and one that could lead to stores ripping out their ATM machines, denying many in the local community free access to cash.   

The £500 million dispute could now take a further two- three year delay before the resolution of the case adding to the costs of the supermarkets, in an already difficult market for retailers, as well as a flood of appeals that will over burden the already struggling CCA appeals system.

Last November 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.  

This Court of Appeal’s ruling had come 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.

Colliers estimated around £500 million is at stake. Each ATM site attracts 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 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 and refused the VOA permission to appeal against its decision.

The Supreme Court’s overruling of the Court of Appeal, allowing the VOA to challenge its ruling is therefore massively “disappointing” says Colliers.  According to John Webber, Head of Business Rates at Colliers International, “Not only is this an enormous waste of tax payers’ money to allow the case to roll on, but it could snatch away from hard pressed retailers the much- needed refunds, they have been waiting for in this period of economic uncertainty. At the very least it will delay them receiving anything for another two to three years, and that’s only if they are successful.”  

Furthermore, as Colliers point outs, because the timescale for the final decision may go beyond the 2021 Rating List, those supermarkets, ATM operators and other vending operators  will need to lodge checks and challenges through the calamitous CCA  system to protect their position on the 2017 Rating List, or they will miss out on four years of refunds an enormous waste of time and resources.

“This will lead to the panic to submit tens of thousands of appeals to CCA, the Government’s appeal system, immediately, adding further to the burden on a massively overstretched and under resourced system, already struggling to cope with the appeals it is dealing with at the moment. **

“This decision effectively paralyses the 2017 Rating List for food store operators and their concessions, as well as anyone else trying to get an appeal through. 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”

Webber continued, “In pursuing this case the VOA is taking the most cavalier action to retail jobs and public finance ever taken by public services. It's just breath taking and all at a time when retailers are closing shops daily and jobs are being lost.”

Colliers also believe the move will accelerate the closure of ATMs in stores across the country. The UK has lost more than 6000 ATMs since 2016 and this decision will only accelerate this decline, bringing even further difficulties for those members of society that rely on them for free access for cash. 

Webber added, “What we really need is for the VOA to get back in the box and instead of chasing the supermarkets, get on with dealing with the outstanding appeals, that have snarled up the system since the duration of the case and leave the humble ATMs and kiddie rides well alone."