By atm Atom on ATMmarketplace.com
A newly imposed property tax on ATMs in the U.K. has come under fire. Shopkeepers have mounted a legal action against the government’s Business Rates Valuation Office for its decision to tax retail ATMs as a “business within a business.”
As a result of this decision, which went into effect for most businesses in 2013, thousands of retailers across the U.K. received tax bills — in many cases backdated to 2010 — demanding payment for on-site ATMs.
This additional rate blindsided many retailers who received bills of 5000 pounds ($6479) or more per ATM. Mark Ridgby, chief executive of CVS, called the cash machine Business Rates a “stealth tax.”
This is not the first time the U.K. has seen controversy when it comes to ATMs. Representatives of several banks and the LINK ATM network had it out earlier this year as one of two financial institutions demanded a reduction in Link interchanges fees for off-premises ATM transactions.
Industry representatives argued that lower fees could mean the disappearance of up to one-third of existing off-premises ATMs, and that rural areas would be likely to suffer most from this change.
“Some organizations seem to want to drive people away from cash,” said Ron Delnevo, director of the ATM Industry Association in Europe. “They would be very happy if LINK disappeared.”
The U.K. government also stepped in with two recent mergers: MasterCard-VocaLink; and Diebold Inc.-Wincor Nixdorf.
This month, the U.K. Competition and Markets Authority accepted undertakings — i.e., remedial steps — in the MasterCard-VocaLink merger in lieu of referral by the authority for a lengthy in-depth investigation.
However, in the case of Diebold Nixdorf, the CMA restricted operations in the U.K. until an acceptable remedy can be reached to address the reduction in competition among ATM suppliers.
The legal battle over business rates ultimately reached the U.K.’s Upper Tribunal, where a judgment for shopkeepers would have meant a reprieve of more than 400 million pounds ($518.3 million) in total. However, the government was favored in the court ruling.
Unless a further appeal succeeds, the ATM tax could spell the end of cash machines in many small shops and independent locations throughout the U.K., resulting in a serious loss of cash access for many communities around the country, especially those where banks have already closed branches.