Tesco, Sainsbury’s and the Co-op appeal tax on cash machines that could spell the end of the free ATMs at shops and petrol stations
Some of Britain’s biggest supermarkets are appealing a tax on cash machines that could force them to start charging customers to take out money.
In 2013 the government decided to charge business rates on cashpoints attached to retail premises and sent bills to thousands of retailers backdated to April 2010.
Tesco, Sainsbury’s and the Co-operative Group, who face a total bill of £206million for their cashpoints over the next five years, this week filed an appeal after a legal ruling in April upheld the policy.
Some of Britain’s biggest supermarkets are appealing a tax on cash machines that could force them to start charging customers to take out money
Experts have branded the rates a ‘stealth tax’ and said that it could spell the end of the free ATM at shops and petrol stations.
Customers in areas with banks would still have free access to their cash. But such charges would be resented in rural and small-town areas where banks have closed and residents rely on ATMs outside supermarkets and petrol stations.
ACS chief executive James Lowman said: ‘The policy makes it harder for retailers to offer free-to-use cash machines that are accessible from the outside of their store.
‘This will have wide ranging and damaging implications not just for convenience stores, but also for small businesses, markets and other services on high streets and in neighbourhoods where this is often the only local free source of cash.’
He added the ruling shows ‘what a mess the business rates system is in’ following recent revaluation.
This Is Money has asked Tesco, Sainsbury’s and the Co-operative Group if they will soon charge customers to take out cash and is awaiting response.
Retailers are having to pay a total of £39.3 million a year on cash machines – or nearly £2,800 on average for each ATM, according to rents and rates specialists CVS.
In 2013 the government decided to charge business rates on cashpoints attached to shops and petrol stations and sent bills sent to thousands of retailers backdated to April 2010
While ATMs attached to retailers are having to pay rates, the regime does not apply to free-standing cash machines within stores.
But it still affects many thousands of hole-in-the-wall ATMs, with the number liable for business rates surging from 3,140 in 2010 to 14,068 this year.
Almost one in six – or more than 196,000 – current business rates appeals lodged with the Valuation Tribunal Service relate to cash machines, according to a recent freedom of information request by CVS.
The Association of Convenience Stores has raised fears that the tax on ATMs could not only hit small retailers hard, but also deprive communities of vital access to cash.
It wants to see local authorities use funds announced in the Budget for business rates relief to reduce cost burden for under-pressure shops.