CVS raises alarm over 'tax grab' on convenience store ATMs

Source: CVS

Local Councils in England and Wales had been employing specialist consultants to identify retailers with cash machines that were not subject to business rates.

Backdated bills to 1 April 2010 were then sent to thousands of retail businesses.

The move follows the Valuation Office Agency, the Government's property tax agency, ruling in 2013 that a cash machine that was built into the front of a shop should have a separate, extra rates bill to the main business.

Retailers have strenuously challenged the Government agency, with the issue reaching the Upper Tribunal (Lands Chamber) of Her Majesty's Courts and Tribunal Service in January. The Court Service now say that judgement will be delivered "shortly" by a two-member panel, prompting fears that free cash withdrawals could be a thing of the past if the ruling goes against retailers.

Our analysis shows that the "tax grab" by Councils had seen the number of cash machines being liable for business rates rocket from 3,140 at the start of 2010 tax regime, to 14,068 on 1st April 2017.

The "tax grab" has seen Rateable Values used to calculate business rates for cash machines rise by a staggering 335%, up from £20.14m on 1st April 2010 to £87.64m on 1st April 2017.

The stakes couldn't be higher, as under the new tax regime, rates bills totalling £39.32m for the 14,068 cash machines now liable for rates have been sent out and are due for payment.

The total overall bill, over the next 5 years, will be £205.5MILLION, with smaller shops likely to either have to charge for cash withdrawals to cover the extra tax or have the machines taken out altogether.

The Valuation Tribunal Service say that a total of 6,000 business rates appeals have been "suppressed" pending the decision from the Upper Tribunal which could also trigger tax rebates of about £200m for the last 7 years if retailers are successful. However, the VTS estimates a total of 30,000 out of the 196,360 business rates appeals with them from 2010, almost 1 in 6, relate to cash machines due to "multiple appeals" according to our Freedom of Information Request.

Banks continue to close branches at an alarming rate, meaning that access to cash from retail sites is more important than ever before. Treating an actual cash machine separately from the business that hosts it is nothing more than a ‘stealth tax’.

Should the approach of the Government’s agency be upheld and cash machines removed from the service, villages and communities will be deprived of convenient access to cash local people need and deserve.

We will keep you posted on the outcome of this hearing.
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