Business Rates on ATMs - Gone After A Two Decade Battle!

Posted on: 23/05/2020

Within the last week, the UK Supreme Court has ruled that ATMs do not need to be assessed for Business Rates. Refunds of over £300 Million are now due to those who for many years were obliged to pay this ill-conceived levy.

Nearly two decades ago, the Valuation Office Agency (VOA) came up with the "bright" idea of assessing Through-the-Wall ATMs for Business Rates. In the arcane language that such entities thrive on, the VOA decided that each ATM was a distinct "hereditament".

Of course, the VOA really knew nothing about ATMs, so they decided to speak to the British Bankers Association (BBA) about their intentions.

Now one would have thought that the BBA would have told the VOA to think again, that it was a truly ludicrous idea to put a tax on ATMs that were dispensing cash - then definitely the lifeblood of the UK economy -  largely free-of-charge to a grateful UK public.

But no. The BBA meekly went along with the plans of the VOA and even, helpfully, agreed a schedule of ratable values that would apply, dependent on the number of transactions processed annually by each ATM being assessed.

Now you might think it is strange - even bizarre - that the BBA would agree to this tax on cash.

However, one has to bear in mind that at that stage around 75% of bank ATMs in the UK were located at bank branches and the VOA accommodatingly decided that those ATMs would not be separately assessed for Business Rates.

Put crudely, why should the BBA care too much about Business Rates on ATMs when most of the ATMs operated by their members were not going to be assessed?

Oddly, the matter was never discussed with the non-bank UK ATMs operators, organisations who were not eligible to join the BBA, but operated a growing number of ATMs NOT located at bank branches.

When the non-bank operators, led by our Chairman Ron Delnevo, demanded the right to discuss the issue of ATM Business Rates with the VOA, they were informed at the meeting that it was a fait accompli, because the BBA had already agreed that the machines could be assessed.  

That was the start of a battle between the VOA and the non-bank ATM industry that was to last almost two decades.

The full story of that battle would require a book as long as "War and Peace" to be told properly. It was mostly as dreary as could ever be imagined, although there were lighter moments, as when the VOA asked ATM operators for the addresses of their ATM locations. Oddly, all of the Post Codes became corrupted during transmission to the VOA.

It is believed that some of the ATMs were never found by the VOA.....

In any event, the tide finally began to turn against the VOA when the two retailer owned banks, Sainsbury and Tesco, joined with the Co-op and Cardtronics, a non-bank operator, in a legal battle to over-turn the decision by the VOA to treat ATMs as occupying distinct hereditaments. 

So the decision of the Supreme Court last week can be seen as the culmination of nearly 20 years work.

Justice can be a very long time coming and very expensive to pursue.

Then again, perhaps those two drawbacks make ultimate success all the more satisfying.

Who wouldn't be satisfied with a £300 Million tax refund?



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