ATMs
This publication is intended for Valuation Officers. It may contain links to internal resources that are not available through this version.
This is a Generalist class. Co-ordination responsibilities are set out in Rating Manual: section 6 part 1.
Special Category code 018 should be used. The relevant suffix letter (G) will be computer generated automatically. Sections 8-17 cover particular issues relating to sites of Automatic Teller Machines (ATMs).
This guidance has been updated to reflect the judgment of the Supreme Court in the case of Cardtronics UK Ltd and others (Respondents) v Sykes and others (Valuation Officers) (Appellants) [2020] UKSC 21 concerning whether ATMs situated within superstores and retail ‘host’ hereditaments are properly shown as separate hereditaments in the occupation of the ATM operator.
The Supreme Court reviewed the judgments of the Upper Tribunal (Lands Chamber) and the Court of Appeal, and accepted the reasoning expressed by the Upper Tribunal:
We are therefore satisfied that each of the appeal sites, with the exception of the first floor site at Tesco’s Nottingham store (where the machine is free standing), is capable of being the subject of a separate entry in the rating list” (Para 151 of the UT (LC) decision).
In respect of the site of the ‘moveable’ ATM, the Supreme Court found that the ‘essential qualities’ of this ATM were ‘impermanence and mobility’ and agreed with the Upper Tribunal and the Court of Appeal that, in the light of these characteristics, its site could not form a separate hereditament. The sites of the remaining ATMs were, in principle, capable of being identified as separate hereditaments regardless of whether they were accessed from within the host hereditament or from the pavement etc.
The Supreme Court endorsed the finding that the retailers retained occupation of the ATM sites, accepting the reasoning of the Upper Tribunal in the earlier stage appeal of Sainsbury’s Supermarkets Ltd & Others v Chris Sykes & Others (VOs) [2017] UKUT 0138 (LC) at paragraph 169:
The Store has not, in any of these cases, parted with possession of the site of the ATM, but it has agreed to confer rights on the Bank which substantially restrict the Store’s use of that small part of its premises which comprises the ATM site. The Store has agreed to that restriction because the presence of the ATM furthers its own general business purposes and because the operation of the ATM by the Bank provides the Store with an income.
The Supreme Court approved, at paragraph 49, the finding of the Upper Tribunal that “Both parties derive a direct benefit from the use of the site for the same purpose and share the economic fruits of the specific activity for which the space is used.” The Supreme Court considered this was sufficient to support the conclusion that the sites of the internal ATMs remained in the occupation of the retailers and that the ATM sites did not, therefore, comprise separately rateable hereditaments.
The Supreme Court found there was no distinction between internal-facing and external-facing ATMs in this respect and found that any difference between them was not sufficient to treat them differently. Accordingly, in the particular cases they considered the host store owners, and not the ATM operators, were in rateable occupation of all of the ATM sites.
The decision does not wholly apply to all sites of automatic machines, and even some ATM sites may still fall to be separately assessed where the ‘host’ hereditament has clearly parted with possession of the site and does not directly benefit from the use of the site for the same purpose.
This Section covers the sites of Automatic Vending/Weighing/Teller/Parcel Exchange Machines. It is the site of the machine rather than the machine itself which may be rateable. Automatic machines of all types should be treated as non-rateable since they are not named in the Schedule to The Valuation for Rating (Plant and Machinery) (England) Regulations 2000 SI No. 540, as amended and The Valuation for Rating (Plant and Machinery) (Wales) Regulations 2000 SI No. 1097 ( W.75 ), as amended.
Where considered to be separately rateable, the Primary Description code CX should be used, with the specific description ‘Site of Automatic Vending/Weighing/Teller/Photographic/Parcel (use appropriate wording) Machine’. The suffix ‘And Premises’ should be added where the hereditament includes other contiguous supporting accommodation.
The case of Woolway (VO) v Mazars [2015] RA 373 should be applied and the potential hereditament can be identified by the actual site of the machine or any housing surrounding it. Machines with the “essential qualities of impermanence and mobility” will not be capable of comprising a hereditament, for the reasons set out by the Supreme Court in Cardtronics. The test of what is “impermanent” and “mobile” is a question of fact, rather than one of law, and a common-sense approach should be taken.
The case of John Laing & Son v Kingswood Assessment Committee (1949) 1 KB All ER 224 set out the four ingredients of rateable occupation, being:
- actual occupation
- exclusive occupation for the particular purpose of the possessor
- beneficial occupation
- not too transient
These tests must be applied to the sites of automatic machines. Generally, actual and beneficial occupation should be relatively easy to determine however exclusive occupation and transience may require more detailed information to be obtained from the occupier. It is important to bear in mind that these tests relate to the site, not to the machine itself, which is not rateable.
In the light of the Cardtronics Supreme Court judgment, the approach to applying these tests, in any case where there is more than one potential rateable occupier, will be first to establish whether the ‘host’ of the site has parted with possession of it. Agreements that do not grant exclusive possession of a defined area may suggest that the host has not ‘parted with possession’ of the site concerned. However, this is a question of fact and law, and is likely to involve considering both the details of any agreement relating to the operation of the site or the machine concerned, and the facts of occupation as they exist at the site. If the host has parted with possession of the site, then the possibility arises that the site forms a separate hereditament.
If the host has not parted with possession, it is necessary to consider whether the host remains in rateable occupation of the site. The Supreme Court found that where “Both parties derive a direct benefit from the use of the site for the same purpose and share the economic fruits of the specific activity for which the space is used” the host remained in rateable occupation of the site and there was no separate hereditament. Even where the site is used by the machine operator under an exclusive agreement it is still necessary to consider whether the host occupier remains the paramount occupier because the use of the site is part of the normal business activity of the host. Where the host remains the paramount occupier no separate hereditament will exist.
A hereditament will remain in the rating list until it ceases to be ‘property which is or may become liable to a rate’. Practically, this means a hereditament will continue to exist until it is evidenced at the material day that:
- it is subsumed into a different hereditament, for example, a merger
- it becomes a different hereditament, for example, a split
- it is destroyed, for example by demolition or external factors, fire, flood etc.
In the case of the site of a separately assessed automatic machine, the removal of the machine does not necessarily mean that the assessment should be deleted from the rating list.
The machine may have been removed but the site it occupied may remain together with physical adaptations/features, for example protective bollards or foundations.
The valuation of vacant machine sites should be subject to the same considerations, such as valuing at the antecedent valuation date and taking into account the impact of any Material Change of Circumstance in the locality, as would be applied in the case of any other class of property.
- location of site for example, Supermarket, Petrol Filling Station, Shopping Centre, Leisure Park, University, Railway/Bus Station, Factory Village, Hospital, Retail Park
- type of machine and what service it provides.
- is the machine moveable, without substantially demolishing it or its setting?
- name and address of operator and operator’s reference for each machine (where displayed)
- where part of another property, the name of the host and the nature of the host’s business
- a copy of any lease or licence agreement between the host and the machine operator.
- general description of the site and machine for example, Stand-alone site, Internal site.
- associated Rateable Plant and Machinery for example, CCTV.
- dimensions (GIA) of any associated accommodation.
- details of Site construction, foundations and settings: a record should be made of the means of attachment of the machine to such features.
- services provided to the site for example, phone line, electricity, alarm system, water, drainage etc.
- public / Customer access to the site; is this 24 hours or is it restricted? Details of any restrictions.
- responsibility for maintenance and stocking of the machine. If this is carried out by contractors, who instructs the contractors.
- survey details are to be saved in the EDRM property folder and named according to the standard naming conventions.
For all sites of automatic machines, other than ATMs, a copy of the licence/rental agreement should be requested. This must be placed in the EDRM property file and named according to the standard naming convention. The principal method of valuation is by reference to rents and licence payments, although where substantial expenditure has been made on the provision of foundations and settings, or other structures, regard should be had to that cost where not reflected in the site rent. Where costs are an issue, reference should be made to the Rating Cost Guide.
There may be cases where a large number of sites for machines are included in one rental agreement. The global sum payable may not provide a reliable indication of the individual value of any particular site within the rental agreement if a simple numerical apportionment is used.
The advice set out under sections 9 to 17 is specific to sites of ATMs and the introduction under paragraph 1, above, concerning the Cardtronics judgment is of particular relevance.
Typically there are three types of ATM sites:
- ‘Hole in the Wall’ - where the ATM screen protrudes through the wall of a building so that customers do not have to enter the host building to use the machine.
- Internal Built - where the ATM is built into, or attached to, the structure of the interior of the host building such as in shopping malls or hospitals for example.
- Free Standing Machines – where the ATM remains in position by its own weight. These can be external or internal. An example is the pod type of ATMs often found at petrol filling stations, and roadside restaurants
The first consideration, when a potential hereditament has been identified, is to identify the occupier. This might be the operator or the occupier of the host hereditament. The tests applied in the Cardtronics Supreme Court judgment should be applied as set out in paragraphs 3 and 4, above.
Where an ATM site is located within a host hereditament, with both parties deriving a direct benefit from the use of the site for the same purpose, it is likely that no separately rateable site of an ATM hereditament will exist.
As with all automatic machines, it is only the site of the machine and any associated accommodation which is rateable and not the machine itself; see paragraph 2.
The tests from the Supreme Court judgment in Cardtronics should be applied (as set out in paragraph 4) to determine whether an ATM operator or the occupier of the host property is in rateable occupation of a particular site. Factors to be considered include:
- how the machine is fixed
- where it is located
- the agreement under which the site is occupied
- the corporate and contractual relationship between the operator and the occupier of the host site
- whether the ATM appears to form part of the normal business activity of the host occupier
The following deals with the various aspects of rateable occupation for ‘Hole in the Wall’ ATMs:
11a Actual occupation
This should be self-evident (except in the case of vacant sites). In cases where the site falls within a host hereditament it is necessary to also consider whether the host shares occupation of the site on the basis of the tests applied by the Supreme Court in the Cardtronics case and set out in paragraph 4 above.
11b Beneficial Occupation
As the operator is able to service its customers and derive an income from the operation of the ATM it is likely there will be beneficial occupation of a site. The test of shared purpose or shared benefit, as applied by the Supreme Court in its judgment in the Cardtronics case, should be applied, as described in paragraph 4, above, and 11c, below.
11c Exclusive Occupation
Determination of this will involve applying the test approved by the Supreme Court in its judgment in the Cardtronics case – as set out in paragraph 4, above. In cases where the site of the machine falls within another hereditament, it will be necessary to determine whether the occupier of the host hereditament has ‘parted with possession’ of the site, and, if the host has not parted with possession, whether both the operator and the host “…derive a direct benefit from the use of the site for the same purpose”, in which case the host is likely to remain in rateable occupation of the ATM site.
11d Not too Transient Occupation
Owing to the fact that a hole is specifically created for the ATM, the occupation is unlikely to be considered too transient.
Paragraphs 11a – 11d apply equally to this type of site. In its judgment in the Cardtronics case, the Supreme Court found no distinction between the sites of internal-facing and external-facing ATMs and the tests set out in that judgment should be applied equally to this class. The fact that the host controls the access of the public to the ATM does not prevent the operator being in paramount control of the site.
Paragraph 11d in particular applies to this type of ATM. For the reasons described in Paragraph 3, above, regard must be had as to whether the machine concerned has the ‘essential qualities of impermanence and mobility’, in which case the site of the machine is unlikely to be capable of comprising a hereditament.
It is particularly important to identify the occupiers of the ATM site and the host property correctly. In deciding whether an ATM site is occupied by the occupier of the host property, the ‘corporate veil’ must not be pierced. For example, it may be correct to assess the site of the ATM and the host separately because they are occupied by two separate legal entities even though they are in the same group of companies with similar names. For further advice on the corporate veil, see Rating Manual: Section 3 Part 7 - Part C Occupation by Contiguous Companies, and the effect of the ‘Corporate Veil’. However, this does not override the guidance set out in Cardtronics to consider whether the ATM operator is a lodger rather than a separate rateable occupier.
These can be ‘hole in the wall’, built into the structure inside the premises or free standing within the premises. As the occupier of the ATMs will be the same as the bank branch, there is continuity of occupation and no separate assessment of the ATM site will be appropriate.
- Survey Requirements
Caseworkers and referencers should note the following details during inspection:
- location of site for example Supermarket, Petrol Filling Station, Shopping Centre, Leisure Park, University, Railway/Bus Station, Factory Village, Hospitals, Retail Park
- is the machine easily moveable?
- number of machines on the site
- pay to use or free to use? If pay to use, the charge to be paid should be noted
- any other services available such as mobile phone top up
- name and address of operator and operator’s reference (where displayed)
- where part of another property, the name of the host and the nature of the host’s business.
- general Description of the site and machine for example: “Hole in wall”, Stand-alone site, Internal site
- associated Rateable Plant and Machinery, for example, CCTV
- dimensions (GIA) of any associated accommodation
- details of site construction, foundations and settings; a record should be made of the means of attachment of the machine to such features
- services provided to the site, for example phone line, electricity, alarm system, water, drainage etc.
- public / Customer access to the site; is this 24 hours or is it restricted? Details of any restrictions
- responsibility for maintenance and stocking of the machine and, if this is carried out by contractors, who instructs the contractors
- a photograph should be taken of the machine
- survey details are to be saved in the EDRM property folder and named according to standard naming conventions
See Practice Notes for Valuation Schemes for the appropriate Rating Lists.
A scheme of valuation was agreed with representatives of the Inter-Bank Rating Forum [IBRF], the LINK ATM Scheme and the Association for Cash Machine Operators. The agreed scheme is set out in Practice Note 1.
18a. Background
Electronic Delivery Lockers are typically situated within covered shopping malls, supermarket car parks, bus/train stations and on petrol filling station forecourts. The market is dominated by several main operators. These sites house lockers used by the general public to collect parcels ordered online and are accessed by inputting a security code which is provided to the customer by text or email, and should not be confused with supermarket ‘in house’ click and collect facilities.
Historically the motor trade utilised similar lockers for the distribution of parts. These sites are now becoming more commercially viable with many operators expanding into the retail sector.
18b. Growth Since AVD
This class has rapidly expanded due to the gaining popularity of internet shopping offering more convenient delivery options. Indicative values as contained within Practice Note 3, do not reflect the market growth since the Antecedent Valuation Date.
18c. Identifying the hereditament
It is important to be aware it is the actual site which is being assessed, not the structure which houses the lockers. The actual banks of lockers are normally non-rateable chattels as they are not listed within the current plant and machinery regulations (see paragraph 3 above for full details). More substantial structures in the nature of buildings will form part of the hereditament.
18d. Rateability
The usual rules governing rateability apply, in that if a site is considered of sufficient permanence, and definable, then it will be rateable. Guidance on the identification of the hereditament and rateable occupation are contained within paragraphs 3 and 4 above.
Sites located physically inside other premises might not fulfil the requirement of having separate paramount control, so may not be separately rateable. Guidance in this respect should be drawn from the Cardtronics Supreme Court judgment (see above re sites of ATMs).
19a. Co-ordination
This advice is in respect of Cycle Docking Stations. The class has a primary description code MX and a Special Category Code 999, with a suffix G.
19b. State of the Industry
Cycle sharing schemes are a facility in which bicycles are made available for hire to individuals normally on a short-term basis. The main purpose is transportation: bike sharing allows people to depart from point “A” and arrive at point “B” free from the worries and costs associated with ownership.
19c. Identification
Cycle Docking Stations can vary in their nature from a simple rack placed along the public highway as with the scheme in London, to fold-up bikes located within lockers at railway stations.
Often subject to an initial membership fee followed by a rental fee per use, users can rent a bike for a period of time, for example hourly or daily, and both retrieve and return the bike to any scheme docking station.
19d. Rateability
The VOA previously agreed with Transport for London (TFL) the rateability of the BCH Docking Stations across London. Actual and exclusive and not too transient occupation was determined along with beneficial occupation. The benefit to Transport for London being a service to improve the health of Londoners, as opposed to profit-making.
Docking stations are considered to be a hereditament falling under the concept of ‘lands’ in accordance with LGFA 1988 s64(4)(a).
As chattels the bicycles cannot be ‘lands’ and therefore do not form part of the hereditament. It is noted that chattels may be ‘rated’ with land where they are enjoyed together with land and enhance the value of the land by enjoying a degree of permanence. A bicycle is very clearly a chattel which moves about from one docking point to another. Therefore it is the site of the docking station itself that is rateable together with any improvements to the land such as the metal post in the ground and foundation.
It is considered that a hypothetical tenant would be willing to pay a rent to operate a cycle hire scheme on such a site whether it be to generate profit or, as with the TFL scheme, to provide a service benefitting local people. A number of towns and cities throughout the UK have introduced similar schemes. However many of these are operated in partnership between cycle share scheme operators and partners including hospitals, universities and railway companies, often on the site of the partner. Careful consideration is therefore required when determining who is in paramount control and also the actual boundaries of the site.
19e. Types of Cycle Docking Stations
Cycle Docking Stations generally fall into 3 categories:
- Docking station located on a public highway/pavement exclusively run by a particular occupier. This may be a private individual/company or a local authority. Rateable occupation is satisfied and entry into the rating list is appropriate.
- Docking station located inside or outside a train station, university or hospital etc, exclusively run by a particular occupier. This may be a private individual/company, local authority or rail company etc. Rateability will depend on identification of the rateable occupier and where the docking station is located. For instance the rateable occupier may be a train company who has the scheme managed by a partner. If the docking station is located outside of the train station buildings but on operational land belonging to the railway, it is highly likely the docking station should be treated as within the cumulo railway hereditament and not separately rateable.
- Docking station located within a train station or operated by a rail company on operational land. Bikes may be paid for through the station ticket office and bikes can only be returned to docking stations at specified train stations within the rail company’s region.
Once facts have been determined it is expected that no assessment would be required as rateable occupation would fall with the rail company and as stated above, any assessment would fall to be reflected in the cumulo assessment.
19f. Extent of the Hereditament
It is envisaged that in most circumstances the hereditament will consist of a rack of bike stations similar to those shown at the end of this note. It is considered that in terms of contiguity, the set of racks located on the land forms the hereditament. Where different sets of racks are separately located away from each other, then each set will form its own hereditament.
19g. Action Required:
Sites not in rating and existing sites
Where a docking station has not been entered into the rating list, a VOR should be raised and an inspection made to record the details shown in 7 below. Where a docking station is already in the rating list, a check should be made to ensure that the valuation approach is consistent with the instructions in this section.
Referencing
It is recommended that inspections of any such sites are made, with photographs taken and the number of posts or lockers counted. Any obvious areas also part of the demise should also be noted including any reference to the operator of the docking station. This may be located on a separate stand-alone post.
Valuation Approach
Following the approach to valuation adopted for current assessments in London and elsewhere in the UK, it is recommended that a price per post/locker is applied to each cycle docking station in situ.
1 Market Appraisal
According to published industry statistics, the total number of ATM sites in the United Kingdom has reduced from 63,200 in 2018 to 53,457 in 2021. The amount of cash being withdrawn across the ATM network is declining. Over the same period there has been a significant increase in the number of card transactions. However, the reduction in the use of cash is not uniform across the ATM network, with the reduction in usage generally being greater in more affluent areas.
2 Changes from last PN
None other than ATM site valuation scheme
3 Ratepayer discussions
None
4 Valuation Scheme
4.1 There is no agreed valuation scheme. The scheme is based upon the estimated licence fee an operator would be prepared to pay, based upon an estimated sustainable level of commission capable of being generated by the site.
4.2 Commission levels are an economic factor as at the Antecedent Valuation Date and those from years ending March 2020 and March 2021, should form the basis of the assessment throughout the 2023 rating List, unless there is evidence of a valid MCC.
4.3 An MCC may physically affect the site of the existing ATM or be physically manifest in the locality - however a change of operator at a site is not considered an MCC.
4.4 If the site of an ATM becomes operative after AVD, then commissions provided for the later period, may require some adjustment to represent the economic circumstances as they existed at the Antecedent Valuation Date (1 April 2021), but reflecting the physical circumstances at the material day.
4.5 The valuation bands are intended to be drawn sufficiently wide to accommodate the majority of Material Changes of Circumstances (MCCs) and consequential fluctuations in usage. There is therefore an expectation that most MCCs which occur through the life of the 2023 list, will not result in a change of rateable value.
2023 ATM Site Valuation Scheme
| SUB LOC | 2023 RV | MATRIX title | MATRIX description |
|---|---|---|---|
| ATMA | £50 | ATM sites with estimated licence fee (based upon estimated sustainable commission) £0 and £99 | ATM sites with estimated licence fee (based upon estimated sustainable commission) £0 and £99 |
| ATMB | £175 | ATM sites with estimated licence fee (based upon estimated sustainable commission) between £100 and £249 | ATM sites with estimated licence fee (based upon estimated sustainable commission) between £100 and £249 |
| ATMC | £375 | ATM sites with estimated licence fee (based upon estimated sustainable commission) between £250 and £499 | ATM sites with estimated licence fee (based upon estimated sustainable commission) between £250 and £499 |
| ATMD | £750 | ATM sites with estimated licence fee (based upon estimated sustainable commission) between £500 and £999 | ATM sites with estimated licence fee (based upon estimated sustainable commission) between £500 and £999 |
| ATME | £1250 | ATM sites with estimated licence fee (based upon estimated sustainable commission) over £1,000 | ATM sites with estimated licence fee (based upon estimated sustainable commission) over £1,000 |
1 Market Appraisal
1.1 Whilst ‘online shopping’ volumes continues to increase, values for individual sites of electronic delivery lockers remains relatively constant. The reasons for this are primarily two-fold. Firstly, where demand is high it is not unusual to find multiple sites housing electronic lockers, which effectively dilutes the number of visits to any one specific site. Secondly, in busy locations, intensity of use is limited by the operating model which requires customers to be given a reasonable timeframe for parcel collection. A threshold of usage is therefore in place which cannot be increased unless additional lockers are added.
1.2 Many supermarkets and other retailers now offer ‘on site’ grocery collection, often provided by locker facilities outside the main store, but within the operator’s site. It should be noted, where these are provided for the purpose of collecting the stores own goods or produce, separate assessment is inappropriate.
2 Changes from last PN
2.1 There have been no changes to the approach as adopted for 2017
3 Ratepayer discussions
3.1 None have been held with the industry
4 Valuation Scheme
4.1 For 2023, there is no agreed valuation scheme. The following rateable values should be used -
| Site type | 2023 Rateable Value | Description of Band |
|---|---|---|
| Box A | 900 | The poorest locations, lack of visibility is likely to be problematic. Sites may be positioned within car parks/ service yards at the rear of buildings in areas of low density. |
| Box B | 1200 | Predominately Industrial locations, lack of visibility and passing traffic will restrict use. |
| Box C | 1500 | Sites located within areas where there is a mix of commercial and residential use. This will include sites at neighbourhood shopping parades, or on petrol station forecourts (not superstores). |
| Box D | 1750 | Sites in prominent locations within large towns or on major retail parks. A typical site may be located adjacent to a superstore, often on a major supermarket petrol station forecourt. |
| Box E | 3300 * | Sites in the best locations including high streets within major cities, busy transport hubs, or prime out of town shopping centres. * Sites larger than average size (over 84 lockers) or those in particularly prominent positions within shopping malls, should uplifted & valued on an individual basis. |
1. Market appraisal
1.1 The number of ATM machines has increased over the last 7 years but the move away from Pay to Use to Free to Use has continued.
Number of machines in UK
2008: 63,900
2015: ( June) 69,900
Number of Cash Withdrawals (Millions) in UK
2008: Free to Use 2,765 Pay to Use 101
2014: Free to Use 2,769 Pay to Use 62
This includes all cash withdrawals by customers at their own banks or building societies. Over 97% of cash withdrawals at UK ATMs by UK cardholders are free of charge. (Source LINK website)
1.2 The above statistics are against a back ground of Contactless payments becoming more popular – there were 319 million such transactions in 2014 compared with 100 million in 2013. In 2014 there were 58 million contactless cards in circulation and the average transaction as at December 2014 was valued at £8.26. (Source the UKCARDS Association)
1.3 The estates run by the Independent ATM Deployers (IADs) have increased in size with some banks reducing their estate of remote ATMs. An example of this is the Co-op Bank Plc has removed its ATMs from Co-operative retail premises during 2014 to 2015 and sites are now occupied by Cardtronics (trading as Cashzone).
2. Changes from last practice note
2.1 Transaction numbers from Pay to Use Sites should be multiplied by 3 to calculate the fair maintainable transaction numbers for the site.
3. Ratepayer discussions
No formal discussions have been held with individual occupiers and there is no agreed scheme. However, consultation has taken place with LINK.
4. Valuation scheme
4.1 There is no agreed valuation scheme. The scheme which is being adopted is based upon the level of sustainable cash withdrawal transactions. The scheme reflects the fact that the majority of remote ATM sites are held on licences or leases the terms of which are not uniform and vary significantly between operators.
4.2 The level of sustainable transactions is evidenced by actual cash withdrawal transaction numbers for years ending 31 March 2014 and 31 March 2015. Transaction numbers are an economic factor as at the Antecedent Valuation Date and those from years ending March 2014 and March 2015 should form the basis of the assessment throughout the 2017 rating List, unless there is evidence of a valid MCC.
4.3 An MCC may physically affect the site of the existing ATM or be physically manifest in the locality - however a change of operator at a site is not considered an MCC. It should be noted that only when a site ceases to exist should it be removed from the Rating List - see RM section 1120 para 6. It is possible for a site to be vacant whilst there is a change of operators – this does not constitute grounds for deletion.
4.4 Where a fee is charged by the machine operator for a cash transaction (Pay to Use) the actual transaction numbers should be multiplied by 3 to arrive at the number of sustainable transactions.
4.5 If the site of an ATM becomes operative after AVD then volumes of transactions evidenced for the later period may require some adjustment to represent the economic circumstances as they existed at the Antecedent Valuation Date, being 1 April 2015 but reflecting the physical circumstances at the material day.
4.6 The valuation bands are replicated from the 2010 agreed scheme. They are drawn sufficiently wide to accommodate the majority of Material Changes of Circumstances (MCCs) and consequential fluctuations in transactions. There is therefore an expectation that most MCCs which occur through the life of the 2017 list will not result in a change of rateable value.
4.7 2017 Valuation Scheme
| Band | Number of Maintainable Cash Transactions | Rateable Value |
| A | 0-2,449 | 250 |
| B | 2,500-4,999 | 550 |
| C | 5,000-9,999 | 900 |
| D | 10,000-14,999 | 1,300 |
| E | 15,000-24,999 | 2,000 |
| F | 25,000-49,999 | 3750 |
| G | 50,000-74,999 | 5,950 |
| H | 75,000-99,999 | 8,300 |
| I | 100,000-149,999 | 11,250 |
| J | 150,000-199,999 | 14,000 |
| K | 200,000-249,999 | 18,000 |
| L | 250,000-299,999 | 22,000 |
| M | 300,000 and over | 25,000 |
This memorandum provides specific guidance on the method of valuation for rating purposes of remote Automatic Teller Machines (ATMs), which has been accepted by the Chief Executive of the Valuation Office Agency and discussed and agreed with representatives of the Inter - Bank Rating Forum [IBRF], the LINK ATM Scheme and the Association for Cash Machine Operators [ACMO].
This memorandum is recommended to all rating surveyors for guidance.
1. General
1.1 ATMs are commonly located in a wide variety of commercial, business, leisure and other locations, and may be present in many types and combinations of features. This agreement relates only to those ATMs which are remotely sited and capable of separate assessment as they do not form part of a larger hereditament in the same occupation, for example an institution’s hereditament. The more detailed aspects of unit of assessment are not within the scope of this memorandum, they are considered within the Rating manual - Section 6 part 3 - Section 1120 : Sites of Automatic Machines which details the approach to determine rateability and the Rating Manual: section 3 part 1- The Hereditament which provides guidance to assist with correct identification of the hereditament.
1.2 The agreement is applicable to all remotely located rateable ATM sites irrespective of the type of facility or structure housing the ATM. For the avoidance of doubt it does not apply to ATM sites, which are included in their host hereditament and are not separately assessed. Appendix 1 to RM Section 6 part 3 Section 1120: Sites of Automatic Machines provides illustrated guidance to assist in the correct identification of the unit of assessment.
1.3 The machine itself (ATM) should be treated as non-rateable since it is not specified in the Valuation for Rating (Plant and Machinery) Regulations. The foundation or setting may however be rateable within Table A of Class 4 of the Regulations. The site of the ATM, including any hole in the wall through which it projects, is rateable, together with that element of any associated structure, which provides shelter and security for the ATM, and any contiguous premises occupied with it (i.e. a secure room).
1.4 An appraisal by IBRF/LINK of market conditions and issues relevant to the providers is contained at Appendix 1. For the avoidance of doubt it does not form part of this Memorandum of Agreement and is included for information only.
2. The basis of the agreement
2.1 The agreement has been formulated having regard to the fact that the majority of remote ATM sites are held on licence/lease terms which are not uniform and vary significantly between operators. The licence evidence together with consideration of average occupancy costs at and around the antecedent valuation date for the 2010 Rating List, 1 April 2008 has enabled a fair and equitable basis for assessment to be derived. It also recognises how the market operates, with deals being predominantly struck on a basis reflecting (in part or totally) the number of cash transactions. Operators are typically agreeing a minimum fixed fee in addition to a fee per transaction if transactions exceed a pre-determined threshold.
2.2 The scheme of valuation has been agreed based on a broad and all embracing approach having regard to the number of annual cash transactions the site is capable of consistently sustaining. The scheme is underpinned by rental and other evidence provided by the ATM operators and LINK on behalf of their members.
2.3 Cash transactions are, wherever possible, to be taken for the periods 2006 and 2007 to evidence the sustainable level of transaction numbers for the ATM at the site, but reflecting the physical circumstances at the material day. Transaction numbers are an economic factor as at the Antecedent Valuation Date (AVD) and therefore those to be retained for the 2010 rating list unless a valid MCC is evidenced. An MCC may physically affect the site of the existing ATM or be physically manifest in the locality, for example siting of a new ATM, or removal of site of existing ATM. A change in operator alone is not considered an MCC and the level of transactions evidenced at AVD should be retained.
2.4 If the site of the ATM becomes operative after AVD then volumes of transactions evidenced for the later period may require some adjustment to represent fairly the economic circumstances as they existed at the Antecedent Valuation Date (AVD), 1 April 2008, but reflecting the physical circumstances at the Material Day. Comparison with similarly located sites will enable this.
2.5 The valuation bands below are replicated from the 2005 agreed scheme and are unaltered. They are drawn sufficiently wide to accommodate the majority of material changes of circumstances (MCCs) and consequential fluctuations in transactions. There is an expectation that most MCCs, which occur through the life of the 2010 list, will not result in a change in rateable value (RV).
2.6 The rateable value to be adopted reflects the average price per cash transaction (ppt) evidenced for the band.
3. The 2010 Scheme of Valuation
| Band | Maintainable Cash transactions | Rateable Value | |
| A | 0 | 2,499 | 250 |
| B | 2,500 | 4,999 | 550 |
| C | 5,000 | 9,999 | 900 |
| D | 10,000 | 14,999 | 1,300 |
| E | 15,000 | 24,999 | 2,000 |
| F | 25,000 | 49,999 | 3,750 |
| G | 50,000 | 74,999 | 5,950 |
| H | 75,000 | 99,999 | 8,300 |
| I | 100,000 | 149,999 | 11,250 |
| J | 150,000 | 199,999 | 14,000 |
| K | 200,000 | 249,999 | 18,000 |
| L | 250,000 | 299,999 | 22,000 |
| M | 300,000 and over | 25,000 |
3.1 There is no interpolation between the bands which are wide by design to maintain confidentiality of the cash transaction base.
3.2 With regard to Band M it is recognised that very high volume sites may require a degree of flexibility, and whilst £25,000 RV is expected to provide a ceiling value this may be exceeded if in all the circumstances it appears reasonable.
3.3 Two or more rateable sites in the same occupation will comprise one relevant hereditament and the approach to valuation is to be by reference to the volume of cash transactions that each ATM site is reasonably capable of maintaining as at the AVD. The rateable value will be the aggregate of the appropriate scale values for each ATM.
3.4 Two or more rateable sites in different occupations will comprise separate relevant hereditaments.
IBRF/LINK Overview of market conditions
ATMs are a familiar sight on the high street, and elsewhere in locations such as railway stations, leisure parks and within shopping centres. In recent years both banks and independent ATM deployers have been placing a growing number of ATMs in locations remote from bank branches in response to customer demand for greater convenience in obtaining cash.
The remote ATM market is beginning to mature with operators concentrating on “quality rather than quantity”. With the benefit of the experience that not all new locations prove successful, operators are typically agreeing a minimum fixed fee in addition to a fee per transaction if transactions exceed a pre-determined threshold. A fee based upon the actual level of usage has its attractions especially as the supply of prime remote locations is limited. When combined with the increasing servicing, maintenance and repair costs of operating the ATMs, many sites will represent a liability after the original fee has been taken into account and this inevitably influences whether or not the operator seeks to renew his agreement at the end of the term and at what licence fee level.
Another consideration taken into account by ATM operators as existing licenses come up for renewal is the fact that, over the period of the agreement, other ATMs (be they branch or remote) might have been installed. These installations will affect the levels of transactions of the existing ATM and reduce the value of the individual site.
Growth in the total number of ATMs has slowed in recent years, with the number of transactions per cash machine beginning to fall. Some expect a gradual shift away from cash towards electronic payment methods to reduce ATM transactions and the value of ATM sites over coming years.
One of the few areas of growth in 2007 and 2008 has been in free-to-use ATMs in lower income areas, which previously did not have free-of-charge access to cash. These ATMs form part of a government-sponsored and industry-supported initiative to improve financial inclusion in these areas. The ATMs have relatively low volumes of transactions, and may be run at a loss.
1. General
1.1 Electronic Delivery Lockers are typically situated within covered shopping malls, supermarket car parks, bus/ railway stations and on petrol filling station forecourts. The main operators are Amazon, In Post and By Box, however other companies are now expanding into this developing market.
1.2 These sites house lockers used by the general public to collect parcels ordered online and are accessed by inputting a security code which is provided to the customer by text or email.
1.3 Historically the motor trade utilised similar lockers for the distribution of parts. These sites are now becoming more commercially viable with many operators expanding into the retail sector.
1.4 This class has rapidly expanded due to the gaining popularity of internet shopping offering more convenient delivery options. Indicative values contained within this Practice Note, do not reflect the market growth since the Antecedent Valuation Date of 01-April-2008.
1.5 It is important to be aware it is the actual site which is being assessed, not the structure which houses the lockers. The actual banks of lockers fall to be non rateable chattels as they are not a listed item within the plant and machinery regulations (see Rating Manual - Section 6 part 3 - Section 1120 paragraph 3 for full details).
1.6 The usual rules governing rateability apply, in that if a site is considered of sufficient permanence and definable then it will be rateable. Guidance on the identification of the hereditament and rateable occupation are contained within Rating Manual - Section 6 part 3 - Section 1120 paragraphs 3 and 4. Sites located physically inside other premises such as convenience stores might not fulfil the requirement of having paramount control, so may not be separately rateable.
2. The basis of valuation
2.1 Sites should be data captured on RSA using the following instructions. When input correctly, this survey data will automatically produce a pattern valuation.
2.2 The matrices and access paths have been created centrally.
2.3 Careful judgement must be taken in selecting the appropriate Sub Location Code from the list shown below, as this will automatically run to a designated matrix and produce the Rateable Value as indicated.
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BOXA - This should be used for poorly located sites which have limited footfall and passing traffic RV £450
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BOXB -This should be used for sites within predominately industrial locations, lack of visibility is likely to be problematic. RV £600
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BOXC - For sites located within areas where there is a mix of commercial and residential use. This will include sites at neighbourhood shopping parades RV £750
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BOXD - For sites in prominent locations within large towns or on major retail parks. A typical site may be located adjacent to a superstore. RV £1,000
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BOXE - For sites in the best locations including high streets within major cities, busy transport hubs, or prime out of town shopping centres RV £1,750
2.3 Current passing rents should not be used in determining which Sub Location Code to use, as market demand and rental levels have significantly changed since the Antecedent Valuation Date. It is also very common for such rental agreements to cover multiple sites in more than one location.
3. Identification of the “unit of assessment”
3.1 Consideration must be given whether to bring the site into the Rating List as “new” or a “reconstitution”. In general terms where the site does not form part of an existing hereditament, such as those situated within shopping malls or railway stations, these should be treated as new assessments. Where sites are located within the demise of an existing assessment such as petrol filling stations or supermarket car parks, then reconstitution will be required. It is vital to consider if other split outs are required to the host property before progressing any case.
4. Adopting the correct effective date
4.1 The nature of Electronic Delivery Sites have changed dramatically in recent years from a predominately motor trade lead operation to a more commercial retail use. This potentially creates problems when attempting to establish the correct effective date for the site in its present state or position. Where difficulties arise in ascertaining this date, and it cannot be proven the site was in existence as at 01-Apr-2010 then Date of Schedule should be used. Where full facts are known, the actual effective date should be adopted.