Supermarkets Set To Gain £500 Million In Refunds As ATM Judgement Released

The Supreme Court has today handed down judgement and found in favour for major supermarkets (Tesco’s, Sainsbury’s and the Co-operative Group) and convenience store ATM operator Cardtronics UK in their long running dispute with the Valuation Office Agency (VOA) concerning business rates and ATM machines. The decision has been welcomed by lawyers at Irwin Mitchell as a sensible and “right” decision.

The Supreme Court’s ruling upheld the Court of Appeal’s decision in November 2018 that ATMs located both inside and outside of stores should not be assessed for additional business rates on top of the normal store business rates costs that retailers already face. Although the Court of Appeal refused the VOA permission to appeal against its decision, in May 2019, the Supreme Court overruled and allowed the VOA this right of appeal.

This new Supreme Court decision has however firmly ruled that all ATMs both inside and outside stores should not be additionally assessed.

Rating experts have calculated that around £500 million has been at stake. Each ATM site would have attracted an average rates liability of around £4000. The refunds to the supermarkets are estimated to be in the region of £496 million.

This decision comes as a massive relief to the retailers who faced a substantial rates burden if the case went the wrong way. There were also fears that if the appeal had been allowed, many retailers would  also have had little choice but to reconsider the viability of offering free ATMs services for the benefits of their customers. This would have meant many would have been taken out -to the detriment of the local community who rely on ATMs for free cash.

Expert Opinion

“We have been waiting with bated breath for today to see whether the VOA could change the tide of recent decisions that have been made against it. Ultimately the Supreme Court re-affirmed the position taken by the Court of Appeal and it has come to absolutely the right decision. Retailers will certainly be breathing a sigh of relief and looking forward to their significant rebate.

"If the judgment had gone the other way it would have been disastrous for retailers and the consumer market generally as retailers would have inevitably pulled out cash points and the concept of “free” cash points would have been a thing of the past. Further the VOA would have attempted to tighten its grip on similar shared facilities on retail premises that it had not considered before in an attempt to extract as much cash from retailers and businesses as possible.”

Catherine Dear - Senior Associate