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UK pushes tax relief for merchants who offer fee-free ATMs

The UK government is urging local councils across the country to award tax breaks to shopkeepers who offer "free-to-use" ATMs.

January 6, 2015

The U.K. government is urging local councils across the country to provide tax relief to shopkeepers who offer fee-free cash machines on their premises.

The scheme has been introduced as a means to make cash more accessible to British consumers — particularly the poor and the elderly — who use cash for more than half of all purchases, said a press release from the U.K.'s Association of Convenience Stores.

According to the ACS, the government wants councils to make full use of the nation's business rates retention scheme, under which the central government funds 50 percent of local discounts to businesses. Community-based councils ante up the remaining 50 percent and determine how the relief fund is administered.

"Free-to-use cash machines are a vital service that we are asking councils to take seriously," said Britain's High Street Minister Penny Mordaunt. "Councils can reduce rates for providers that commit to introduce new cash machines into areas, or remove charges on existing machines. We want councils to use their local business rates discount powers to ensure better access to cash machines in all areas and on our high streets."

The Association of Convenience Stores has developed a guide for shopkeepers and councils that touts the various benefits to the community of rate relief. The British government has issued advice for councils looking to use these powers to improve access to cash machines.

Currently, the U.K. has more than 67,000 ATMs, according to the ACS guide. The machines are used by the majority of UK adults at least once per month and are the preferred medium for obtaining cash. A report by theDaily Mail said that about one-third of the nation's ATMs charge fees, which average 1.70 pounds ($2.57) nationwide. In the U.S., the average ATM withdrawal fee as of August 2014 was $2.77, according to an annual study bybankrate.com.

The Daily Mail report said that cash machines are still a "lucrative business" even without the withdrawal fee "because the issuer of the card must pay a 27p (41 cents) fee for each withdrawal to the ATM operator."