News

UK slaps merchants, FIs with new tax for hosted ATMs

November 19, 2013

The U.K.'s Valuation Office Agency, the entity that assesses business rates for the nation, has determined that ATMs hosted by stores on behalf of external operators constitute an additional business operating on the premises and should be billed as such.

FIs and merchants are now bracing for backdated bills that could total nearly £500 million ($805 million) for cash dispensers installed in shops, according to a report by the online arm of the Daily Mail.

It's not entirely clear who will be expected to foot the bill — the FI or the merchant. This might depend on the ATM hosting agreement between the merchant and the bank, said Brian Rees, a property consultant for Matthews & Goodman.

Estimates say that up to 67,000 terminals — two thirds of all ATMs in the U.K. — could be stuck with additional taxes, due to the new interpretation of business rates. For their part, the VOA defends the decision to tax.

"Commercial property has to be accurately assessed to ensure no one over- or underpays what is due and it is as part of this commitment that ATM sites are being looked at," the agency said.

Read more about regulatory issues.