£300m of business rates refunds held until “cash tax” decision reached

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Unpaid business rates refunds for the Big 4 worth £300 million are being held until a decision is made on how to tax ATM machines.

According to rating experts and property firm Colliers International, huge sums of business rates refunds are waiting to be dished out to the country’s biggest supermarkets until the outcome of the “cash tax” case is decided.

This case, which is due to be heard in the Court of Appeal at the end of this month, related to whether supermarkets should be taxed separately for ATM machines within their premises.

The Valuation Office Agency (VOA) has argued that retailers should be taxed separately for ATM machines both outside and within their premises, on top of their usual business rates bills.

Each cash machine is understood to have an average rates liability of £4000, adding significant pressure to an already cash strapped industry.

It is understood that whatever the outcome of the court hearing this month, it will be challenged in the Supreme Court next year, further delaying substantial appeals payouts.

“The Big 4 supermarket chains pay enormous rates bill – this year over £1.77 billion between them alone,” Colliers International head of business rates John Webber said.

“And given the pressures on the sector with rising food prices and wage bills and for many a footplate of stores too big for their current needs, it is not surprising we are seeing some consolidation in the sector as the proposed Sainsbury-Asda merger shows.

“Business rate bills are of course just one extra pressure – but a very significant pressure if supermarket chains are not only paying big rates bills but are unable to claim the refunds they are due and now very much need.

“Our clients are asking us to help them save money on their business rate taxes, but it looks like it will be 18 months, at least before the ATM issue is solved. In that time who knows what further difficulties the sector will experience.”

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