Retailers, are you due a rebate? Court of Appeal ruling on ATM rates

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Retailers have been paying business rates dating back to April 2010 for automated teller machines (ATMs) which are built into the external walls of their stores. Real Estate and Real Estate Litigation experts Jane Weaver and Martin McKeague, both specialists within Walker Morris’ Retail team, highlight a recent Court of Appeal ruling which confirms that such ATMs do not give rise to a separate business rates liability.

Cardtronics & Ors v Chris Sykes & Ors (Valuation Officers) [1] turned on whether an ATM that was built into the external wall of a shop was a separate hereditament [2] from the store in which it was housed.  If it was not, it would not give rise to a separate ratings liability and would, instead, form part of the store’s overall rating for valuation purposes.

The Court of Appeal applied both the ‘geographical test’ from the 2015 Supreme Court case of Woolway v Mazars LLP and the principle of ‘general control’ from the 1936 House of Lords case Westminster Council v Southern Railway Company Ltd and confirmed that:

  • where an ATM operator has only a right of access to a machine wherever it happens to be located (as opposed to a right of occupation of a specific unit of property); and
  • where a retailer has “retained sufficient control of the site, in contractual, physical and functional terms”; then
  • there is no “sufficiently coherent and settled ‘unit of property’ capable of forming a separate hereditament”.

WM Comment

The Court of Appeal’s decision means that retailers nationwide could be due business rates rebates of some £500+ million [3] and it is also good news for consumers.  Had the decision gone the other way, that could have impacted the numbers of free ATMs located on store frontages up and down the country.

However, retailers should note that: (a) the opposite outcome (and therefore a separate ratings liability) is likely to arise in cases where an ATM is not, in fact, capable of being moved from place to place to suit a retailer’s requirements and/or because it is situated on a site deliberately designed or adapted to house it; and (b) as at the date of writing, the valuation officers in this case have applied for permission to appeal the decision to the Supreme Court.

Whether or not an ATM will give rise to a business rates liability will turn on both the contractual and factual arrangements in place in any particular case and on the state of the law as it is ultimately resolved. Walker Morris will report on developments and our retail experts will be happy to help any retailers or ATM operators who wish to understand whether or not they might be entitled to a refund and how best to draft their ATM licences so as to minimise ratings liability going forwards.


[1] [2018] EWCA Civ 2472
[2] that is, a self-contained piece of property
[3] Source, Property Week 6 December 2018