The Chancellor's Budget tax raid on the self-storage industry pushed Big Yellow Group into the red as it nursed annual losses of £35.6m.
The Chancellor, George Osborne, moved to make self-storage VAT-able, which has hit the company as about two-thirds of its customers are individuals who cannot claim the extra money back, according to the chief executive, James Gibson. They face an average increase of about 10 per cent or £2.50 a week from October, he said.
The slide into the red for the year to 31 March compares with a £6.9m profit previously, after a £51.4m write-down on its property portfolio as a result of the looming change. Big Yellow – along with rivals Safestore and the British Property Federation – is still in talks with the Treasury over the raid.
But the company also stands to benefit from tax changes, with an estimated £18m in previously irrecoverable VAT on capital expenditure potentially due. The changes would also lower the cost of new sites.