Michelmores Real Estate Soundbite: business rates, staircases and ATM machines

Michelmores Real Estate Soundbite: business rates, staircases and ATM machines

Changes in legislation, alongside a recent landmark ruling in the case of Cardtronics Europe Ltd and Others –v- Chris Sykes and Others (Valuation Officers) [2018] EWCA Civ 2472, have paved the way for new assessment criteria for business rates.

“Staircase Tax” and The Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Act 2018

Take a breath; we will call this “the Act”. The Act came into force on 1 November 2018 and reverses the “staircase tax” which was introduced by the courts back in 2005.  In effect, “staircase tax” simply meant that units, occupied or operated by the same business, which are separated by a third-party’s land, would tend to be assessed for business rates as separate units. This was a largely unpopular principle because, for example, where a business operated out of multiple leased floors of a building, each floor would be separately assessed for business rates because of the third-party (usually a landlord) owning the ceiling, wall or staircase between each. There you have it: “staircase tax”.

The Act has the effect of reversing this principle, by providing that multiple contiguous units which are occupied by the same business and not used for wholly different purposes will be assessed together for business rates purposes. Contiguity may be found even where third-party-owned spaces sit between the units (including the troublesome ceiling, wall or staircase).  Moreover, business which suffered the “staircase tax” between 1 April 2010 and 1 November 2018 may ask that those business rates calculations be revised in accordance with the Act.

“ATM Tax” and Cardtronics and Others -v- Chris Sykes and Others (Valuation Officers)

In 2017, the Upper Tribunal Lands Chamber ruled that “hole in the wall” ATM machines located in the external walls of retail premises (including supermarkets) which were operated by a third party were to be assessed separately from the premises itself for business rates purposes. This upheld a governmental decision taken in 2013.

On 9 November 2018, the Court of Appeal overturned this decision when hearing an appeal by Cardtronics and three major supermarket businesses. The court held that “hole in the wall” ATM machine should not be treated as separately assessed premises for business rates.  It is worth noting that the Valuation Office Agency may yet decide to appeal, so this might not be the end of the story.


In May 2019, the Valuation Office Agency was granted permission to appeal the Court of Appeal’s decision to the Supreme Court.

It is not yet clear when this case will be heard in the Supreme Court; it may be some time before a resolution is reached.  We will continue to follow this case with interest.

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