Yesterday the Supreme Court handed down its much awaited decision in Cardtronics UK Limited (and others) v Sykes and others (Valuation Officers). In what is a fundamental decision to the law on ratings, the Supreme Court found that ATMs should not be separately assessed for business rates, regardless of whether they are situated inside or outside of a retail store.
When considering the significance of an ATM at a retail store, and whether it was to be considered a separate hereditament, the Supreme Court found that the presence of an item of non-rateable machinery, such as an ATM, should not be ignored when determining whether a separate hereditament exists. However, it went on to say that whilst, once a machine has been installed there should be no difficulty in defining the boundaries of a fixed ATM site with sufficient precision to satisfy the geographic test of self-containment, the retail stores had not, in any of these cases, parted with possession of the site of the ATM.
It added that both the retailer and the ATM provider derive a direct benefit from the use of the ATM site for the same purpose and share the economic fruits of the specific activity for which the space is used. Therefore, the ATMs should not be separately assessed for business rates.
This finding will be welcomed by retailers, some of whom can expect a large refund on rates already paid. However, with 34,000 rates appeals awaiting this decision, its impact will be far reaching and, particularly given the current pandemic, smaller retailers will no doubt be glad of the additional money but the requirement for local authorities to refund what is thought to be around £430 million could be detrimental.
Real estate adviser Altus Group predicted that retailers will receive £428.69m in reimbursement for business rates bills on more than 15,000 cash machines in England and Wales since 2010.