Iceland is celebrating after winning a landmark ratings battle in the Supreme Court that could lead to supermarkets and cold stores all over the UK successfully appealing inflated rates bills.
The court had to decide whether the services provided by a specialised air handling system (AHS) used for refrigeration at Iceland’s Penketh Drive, Liverpool store were “manufacturing operations or trade processes” for rating purposes, which would exclude the AHS from the rating assessment.
Up until now plant and machinery, such as solar panels and refrigeration equipment, were factored into the overall ratings bill, but the Supreme Court ruled the AHS should not be.
Robert Hayton, executive vice-president at business rates adviser Altus Group, said: “For grocers, the implications of this decision are therefore far-reaching. Any process that preserves food or products using plant and machinery will need to be looked at.
“This will include every facility in the supply chain from the grower or importer to the shop shelves. Some properties, such as cold stores, may have been overvalued by as much as 40%.”
He said it could affect thousands of properties and save hundreds of millions of pounds in business rates over the five years of the current rating cycle across UK plc.
Iceland said it was confident the judgment would apply to rating valuations at all its stores.
“The Supreme Court ruled that Iceland’s cooling systems should not be taken into account when assessing the rateable value of its stores,” said a spokesman.
“This decision will not only be welcomed by Iceland, but by all retailers operating in a similar manner.”
No comments yet