Eurotunnel, the operator of the Channel Tunnel, has indicated it may pursue legal action against the UK government following a significant proposed increase in its business rates. The company faces a more than threefold rise in its rateable value, from an annual £40 million to £118 million, an increase it has labelled 'unreasonable'.
Business rates are a tax levied on non-domestic properties in England and Wales, calculated based on a property's rateable value. This value, determined by the Valuation Office Agency (VOA), generally reflects the open market rental value of a property. The proposed revaluation for Eurotunnel comes as part of a nationwide revaluation process that typically occurs every few years, aiming to update rateable values to reflect changes in the property market.
The substantial hike in Eurotunnel's rateable value could lead to a significant increase in its annual business rates bill. Such a rise would represent a considerable additional operating cost for the vital transport link between the UK and continental Europe. Eurotunnel's decision to consider legal action underscores the severity with which it views this proposed financial burden.
Legal challenges against VOA valuations are not uncommon, particularly for large and complex properties where valuation methodologies can be contentious. Companies often argue that the VOA's assessment does not accurately reflect the true rental value or operational circumstances of their assets.
The Channel Tunnel is a critical piece of infrastructure, facilitating both passenger and freight transport, and plays a key role in the UK's trade and travel connections with Europe. Any substantial increase in its operating costs could have wider implications for the services it provides.