The operator of the Channel Tunnel said it had been told its business rates would increase by some 200% from next year.
Chancellor Rachel Reeves Responds To October Inflation Rate Data (Image: Getty)
Rachel Reeves has been dealt another huge blow as Eurotunnel vowed to axe its UK projects over sky-high taxes.
The operator of the Channel Tunnel said it had been told its business rates would increase by some 200% next year.
“This unparalleled and unsustainable level of taxation makes any future investment in the UK non-viable,” the Channel Tunnel said.
“It is therefore impossible to develop new services, create jobs, and pursue what is needed for the long-term development of our activities.”
The firm behind the Channel Tunnel has even threatened legal action against the Valuation Office Agency.
Eurotunnel could now scrap its multimillion-pound plans to revive a major freight terminal in east London and cancel an eagerly anticipated freight service direct to Lille to minimise the effect of the reforms set to add £118m to its tax bill in three years.
The company claimed it had “no other choice but to freeze our future investments in railway assets in the UK, starting in 2026”.
Boss Yann Leriche told City AM the business rate hikes would take Eurotunnel’s tax rate on all new projects to over 75 per cent.
“It’s impossible to understand these increases because [business rates] are a property tax based on assets,” he said. “Our tunnels are the same, our terminals are the same, our trains are the same as three years ago.
“A tax increase with inflation or even our revenue, I would understand, but this is totally out of control.”
Ms Reeves is facing a make-or-break Budget, with mounting questions over both her and Sir Keir Starmer’s political futures.
She is widely expected to raise taxes by about £20billion, around half of which will come from a stealth raid on more than 37 million income taxpayers.
But Labour is planning to hit large firms with higher business rates to subsidise lower levies for smaller ones.
The reforms are intended to level the playing field for bricks-and-mortar stores by making the big warehouses used by online giants such as Amazon pay more.
Major transport hubs like Heathrow, Gatwick and Eurotunnel owner Getlink are in line for especially sharp jumps to their business rate bill.
The Chancellor is desperately trying to find extra cash as she wants to scrap the two-child benefit cap, which means low-income families do not receive further benefits when they have a third or subsequent child, to tackle child poverty.
Income tax thresholds are likely to be frozen to plug a gap in her spending plans, which would mean people would be dragged into paying more tax as wages rise.
Eurotunnel hit at Labour, declaring higher costs were “clearly contrary” to plans to grow the economy.
The Treasury said it would support firms “hit hardest” by tax hikes and would continue talks with affected industries over such concerns.
A spokesperson for Eurotunnel said such a hike in business rates, along with other taxes, could put its total tax level at about 75% on UK earnings.
The VOA told the BBC the body “does not determine business rates” and that “next year’s liability has not yet been confirmed”.
