Channel Tunnel Operator Halts UK Rail Investments, Cites Tripled Business Rates
Eurotunnel warns business-rate hike makes future British investment ‘non-viable’ and freezes new UK projects
The operator of the Channel Tunnel has announced it will suspend all future UK rail infrastructure investments after being notified of a proposed nearly three-fold increase in its business rates liability, warning that the surge renders new projects financially unviable.
According to the company, its current business-rates bill of approximately £22 million is expected to rise to around £65 million from April under revised valuations by the Valuation Office Agency, representing a roughly 200 per cent increase.
The operator said that with a marginal tax rate of about 75 per cent when combined with other tax charges, any new investment in UK rail assets would be loss-making.
Eurotunnel revealed that it has already frozen planned capital spending including a £15 million freight terminal reopening in Barking and the launch of a direct freight service from Lille, projects it said were terminated because the new tax burden undermines their viability.
While one ongoing £90 million upgrade will proceed due to existing contractual commitments, future services and capacity enhancements are now at risk unless the business-rates decision is reversed.
The company criticised the proposed hike as fundamentally at odds with government ambitions to increase rail freight, improve connectivity and promote net-zero transport by shifting cargo off roads.
It called for urgent clarity and support from the Treasury, noting the government’s policy paper indicates that relief measures will depend on the outcome of the 2026 revaluation.
In response the Treasury said it would engage with sectors facing large tax uplift and would consider transitional support once the full three-year revaluation picture is available.
It emphasised that business-rates reform is under way, with new rules for high-value properties to take effect from April 2026.
The freeze on investment by the Channel Tunnel’s operator raises broader questions about the UK’s investment environment for large-scale infrastructure and the balance between tax receipts and growth-oriented policy, especially in sectors critical to decarbonisation and trade.
According to the company, its current business-rates bill of approximately £22 million is expected to rise to around £65 million from April under revised valuations by the Valuation Office Agency, representing a roughly 200 per cent increase.
The operator said that with a marginal tax rate of about 75 per cent when combined with other tax charges, any new investment in UK rail assets would be loss-making.
Eurotunnel revealed that it has already frozen planned capital spending including a £15 million freight terminal reopening in Barking and the launch of a direct freight service from Lille, projects it said were terminated because the new tax burden undermines their viability.
While one ongoing £90 million upgrade will proceed due to existing contractual commitments, future services and capacity enhancements are now at risk unless the business-rates decision is reversed.
The company criticised the proposed hike as fundamentally at odds with government ambitions to increase rail freight, improve connectivity and promote net-zero transport by shifting cargo off roads.
It called for urgent clarity and support from the Treasury, noting the government’s policy paper indicates that relief measures will depend on the outcome of the 2026 revaluation.
In response the Treasury said it would engage with sectors facing large tax uplift and would consider transitional support once the full three-year revaluation picture is available.
It emphasised that business-rates reform is under way, with new rules for high-value properties to take effect from April 2026.
The freeze on investment by the Channel Tunnel’s operator raises broader questions about the UK’s investment environment for large-scale infrastructure and the balance between tax receipts and growth-oriented policy, especially in sectors critical to decarbonisation and trade.
