Is the U.K. at Risk of Losing Free Cash Access?
Newly imposed property tax on ATMs in the U.K. has come under fire as shopkeepers mount legal action against a decision by the Business Rates Valuation Office to levy a charge requiring ATMs in retail locations to pay as if they are a separate business. This tax, introduced for most retailers in 2013, saw tax bills sent to thousands of businesses requiring additional payments for business done at the on-site ATMs, often back dated to 2010.
This additional rate blindsided many retailers, with bills of £5000 or more received per ATM. Mark Ridgby, chief executive of CVS, said the cash machine Business Rates are really a ‘stealth tax.’
It’s not the first time the U.K. has seen controversy when it comes to ATMs. Representatives for several banks and the LINK network (the U.K.’s network of ATMs) had it out earlier this year as one of two financial institutions demanded a reduction in Link interchanges fees paid for off-premise ATM transactions. Industry representatives argued that lower fees could spell the disappearance of up to one third of the current off-premise ATMs. Rural regions are most at risk of suffering 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, “so they would be very happy if LINK disappeared.”
The U.K. government also stepped in for two recent mergers – MasterCard/VocaLink and Diebold Nixdorf. The U.K. Competition and Markets Authority (CMA) has accepted undertakings in lieu of reference for the MasterCard/VocaLink merger this month. However, the organization has placed restrictions on the operation of Diebold Nixdorf’s business in the U.K. until acceptable remedy of the reduction in major competition can be reached.
As for the legal battle over business rates, the case has reached the Upper Tribunal. Success for shopkeepers would have meant a reprieve of more than £400 million. However, the government was favoured by the court ruling and unless a further appeal is successful it could spell the end of ATM cash points at many small shops and independent locations throughout the U.K. – meaning a serious lack of cash access for many local communities around the country, especially impacting those where banks have reduced or closed branches.