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The case comes as retailers face rapidly increasing business rates, and could have far reaching implications for businesses in the retail and other sectors.
The Supreme Court – the highest appellate court in England & Wales, which hears cases of significant public interest – overturned the decision of the Upper Tribunal and Court of Appeal.
The Supreme Court ruled that Iceland's air handling system, which is used in connection with its refrigeration units, should be regarded as plant and machinery used in connection with a "trade process" and is not therefore rateable. It ruled that trade processes are not limited to industrial processes, given the wider definition in the regulations, and that it covers "the continuous freezing or refrigeration of goods to preserve them in an artificial condition."
This is the second case to successfully challenge a business rates decision in the Supreme Court in the last year, demonstrating the risk of businesses paying over the odds for their property rates. The case was heard against a backdrop of significant concern in the market due to increasing business rates in a challenging market and the Chancellor agreeing to bring the review period forwards.
TLT provided Iceland with expert legal advice from its retail sector experts, property litigation team and business rates experts working together with Iceland's internal team, property and rating advisers Mason Owen and barristers Dan Kolinsky QC and Luke Wilcox of Landmark Chambers.
Matthew Forrest, property litigation partner at TLT, says: "This is a significant decision for Iceland and should make other businesses more confident in challenging their business rates decisions where they and their legal advisers feel they have a case.
"The recent case law suggests that this is a grey area, and a successful challenge could save businesses millions of pounds. It will be interesting to see how the recent decisions of the Supreme Court translate into the decisions being made by the valuation office and lower courts in matters of this nature. Every case will need to be considered on its facts and against the broader market context."
04 April 2018