Eurotunnel has cancelled its UK investments ahead of a potential 200% hike in its business rates.
The Channel Tunnel owner says the impending level of taxation has made UK investments unviable, after the Valuation Office Agency (VOA) calculated its value at £118 million – up almost 200% from £40m in 2023, and 321% from £28m in 2017.
Eurotunnel has cancelled its UK investments ahead of a potential 200% hike in its business rates.
The Channel Tunnel owner says the impending level of taxation has made UK investments unviable, after the Valuation Office Agency (VOA) calculated its value at £118 million – up almost 200% from £40m in 2023, and 321% from £28m in 2017.
The VOA values businesses every three years, with the results used to help set tax rates. This year’s valuation will affect the business rates paid from April 2026-March 2029.
Eurotunnel Chief Executive Yann Leriche told the BBC the company’s plans were “becoming unsustainable”.
“As you know, business rates – it’s a property tax. And our property – the Channel Tunnel – has not changed. It’s still the same tunnel, the same terminal, the same trains. Everything is equal,” he said.
There is also concern that the three-year cycle and uncertainty over long-term tax rates affecting investment plans.
The company has accused the VOA of a lack of transparency regarding its calculation methods, and claims the increase is anti-competitive because it deters investment.
The VOA uses a “receipts and expenditure” method to value large infrastructure projects. A piece of infrastructure’s rateable value (the amount of rent it could have been let for on a valuation date) is different to what its owner will pay in business rates.
A VOA spokesperson said: “All valuations are carried out by experienced professionals in accordance with industry best practice and legal requirements.
“We have engaged with Eurotunnel and their advisers on several occasions to discuss their valuation and fully explain our approach. These discussions are ongoing and we are committed to continuing constructive engagement.
“Ratepayers have the right to formally challenge their valuation with the VOA if they believe it is inaccurate. Should they remain dissatisfied with our response, they may appeal to the independent Valuation Tribunal.”
Business rates are calculated by taking the rateable value and multiplying it by a value (known as a multiplier) which is set by the government.
One of the casualties of the valuation and subsequent cancellation of Eurotunnel’s UK investments is a planned freight service.
Approximately £15m was due to be invested in Barking for unaccompanied lorry trailers to be transported overnight to and from Dourges (near Lille), in a trial starting in 2026.
While Eurotunnel will be unable to increase operator charges to offset the whole tax bill, RAIL understands it has warned that raises could have knock-on effects such as delaying the ability for intermediate stations at Ashford and Ebbsfleet to be reopened.
The government has said it will put in £4 billion to support businesses through transitional relief over the coming years, meaning a more gradual increase in taxation in 2026-27 and 2027-28 before the full bill is paid in 2028-29, which more than doubles its current rate.
One of the reasons values are going up is because previous assessments were carried out in 2021 when businesses were still affected by COVID restrictions.
A government spokesperson added: “We have also published a Call for Evidence which will consider how business rates can support investment, and are exploring options to address concerns ahead of the next revaluation.”
This would seek to address issues raised ahead of the next revaluations in 2029.
But Eurotunnel fears this could set a new baseline from which further increases could be calculated in the following years. It is calling on the government to change the system, wanting a fairer, more predictable format.
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