Channel Tunnel Operator Freezes UK investment Amidst Soaring Business Rate Concerns
Eurotunnel, operator of the Channel Tunnel, has announced it will freeze future investments in UK railway assets starting in 2026, citing possibly unsustainable increases in business rates. The company reports its business rates could rise from £22 million to £65 million.
According to Eurotunnel, the potential rate hike, combined with other taxes, could bring its total UK tax level to approximately 75% of earnings. “This unparalleled and unsustainable level of taxation makes any future investment in the UK non-viable,” the company stated.
Specifically, Eurotunnel has reportedly scrapped plans to reopen a freight terminal in Barking and launch a new direct freight service from Lille, according to the Financial Times.
The Valuation Office Agency (VOA), responsible for assessing property values for business rates, stated it “does not determine business rates” and that “next year’s liability has not yet been confirmed.” A VOA spokesperson confirmed ongoing discussions with Eurotunnel and its advisors regarding valuation, adding that the company can formally challenge the assessment.
The Channel Tunnel, nicknamed “Chunnel,” links Folkestone, England, and Calais, France, and consists of three tunnels: two for rail freight and passenger services, and one for service access. Eurostar,a separate company and Eurotunnel’s largest customer,operates passenger trains through the tunnel connecting London with cities including Paris,Brussels,and Amsterdam.
Eurotunnel has urged the government to “provide certainty on business rates” ahead of the upcoming Budget. The Treasury responded it does not comment on “speculation around future changes to tax policy” and will make final decisions on support once the complete revaluation picture is understood. Business rates are a tax levied on non-domestic properties like shops, pubs, and offices, and the rates businesses will pay are expected to be confirmed in the Budget, taking effect in April 2026.
