The Channel Tunnel operator has frozen millions of pounds of planned investment in the UK and warned rail prices could rise after the Valuation Office Agency (VOA) proposed a 200% increase in its rates for businesses.
Eurotunnel, owned by French group Getlink, said it was “deeply at odds” with the planned reassessment, describing it as “unjustified and confiscatory in nature”. The company currently pays £22m a year in business rates, but expects this could rise to £65m by 2028, even after transition relief. Next year’s bill alone is expected to be almost £36 million.
A Getlink spokeswoman said the proposed increase would impose a marginal tax rate of 75 per cent on new investment, making future investment in UK rail loss-making. “Eurotunnel has therefore frozen all new rail investment in the UK,” she said.
The move has seen the company abandon two key freight projects worth around £15m, including the reopening of a freight terminal in Barking and the launch of a new direct service from Lille. The operator passes on much of its business rates burden to rail operators using the Channel Tunnel, including Eurostar – meaning passenger fares are likely to rise.
Eurostar warned that a tripling of business rates would be “at odds with the government’s ambitions to deliver economic growth, pioneer European rail connectivity and promote low-carbon rail transport”.
The concerns echo those of Gatwick Airport, which has said its planned second runway could be at risk from a possible 300 percent increase in its own business rates.
John Keefe, director of public and corporate affairs at Eurotunnel, said the VOA methodology lacked transparency and was inconsistent with ministers’ pro-growth ambitions. “We’ve had a nine-fold increase in valuation in more than three reviews since 2017,” he told Politico. “If you take all the money out of business rates, there will be nothing left for investment.”
Eurotunnel said it would “take all measures available to it” if the proposals were implemented, including legal action, to “protect its interests and, more broadly, the future of cross-Channel rail”.
It argued that it was being “unduly penalized compared to competitors” whose transport activities were more carbon intensive and were subject to lower taxes.
The VOA said its valuations simply reflect changes in the real estate market and are carried out by experienced professionals in accordance with legal and industry standards. It stressed that it does not set business rates and that discussions with Getlink are ongoing. Companies can challenge assessments and challenge decisions through the Independent Assessment Tribunal.
A government spokesman said targeted support would be provided to companies facing “the largest revaluation increases” and that officials would consider further options before the next revaluation.
Getlink shares fell 1.2 percent in Paris trading on Thursday following the announcement.
