The operator of the Channel Tunnel has frozen millions of pounds of planned investment in Britain and warned that rail fares could rise after the Valuation Office Agency (VOA) proposed a 200 per cent increase in its business rates bill.
Eurotunnel, owned by French group Getlink, said it was in “deep disagreement” with the planned revaluation, describing it as “unjustified and confiscatory in nature”. The company currently pays £22 million a year in business rates but believes this could jump to £65 million by 2028, even after transitional relief. It expects next year’s bill alone to reach nearly £36 million.
A Getlink spokeswoman said the proposed increase amounted to a marginal tax rate of 75 per cent on new investment, making future UK rail investments loss-making. “Eurotunnel has therefore frozen all new rail investments in the UK,” she said.
The move has led the company to abandon two key freight projects worth around £15 million, including reopening a freight terminal in Barking and launching a new direct service from Lille. The operator passes much of its business rate burden onto train operators that use the Channel Tunnel, including Eurostar — meaning passenger fares are likely to rise.
Eurostar warned that a threefold increase in business rates “would be at odds with the government’s ambition of economic growth, pioneering European rail connectivity, and encouraging low-carbon rail travel”.
The concerns echo those raised by Gatwick Airport, which has said its planned second runway could be jeopardised by a potential 300 per cent rise in its own business rates bill.
John Keefe, Eurotunnel’s director of public and corporate affairs, said the VOA’s methodology lacked transparency and was inconsistent with ministers’ pro-growth ambitions. “Since 2017 we’ve had, over three valuations, a nine-times increase in the valuation,” he told Politico. “If you take all the money in business rates, there’s nothing left for investment.”
Eurotunnel said it would “pursue all measures at its disposal” if the proposals go ahead, including legal action to “protect its interests and, more broadly, the future of cross-Channel rail transport”.
It argued that it is “unduly penalised compared to competitors” whose transport activities are more carbon-intensive and face lower taxes.
The VOA said its valuations simply reflect changes in the property market and are carried out by experienced professionals according to legal and industry standards. It stressed that it does not set business rates and that discussions with Getlink are ongoing. Businesses may challenge valuations and appeal decisions through the independent Valuation Tribunal.
A government spokesperson said targeted support would be provided for companies facing “the largest revaluation increases” and that officials were exploring further options ahead of the next revaluation.
Shares in Getlink fell 1.2 per cent in Paris trading on Thursday following the announcement.
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Eurotunnel halts UK investment after ‘confiscatory’ plan to triple business rates