In a dramatic move just days before the UK government unveils its Autumn Budget, Eurotunnel, the operator of the Channel Tunnel, has announced a sweeping freeze on all its planned investments in Britain. The company, which is part of France’s Getlink, says it is responding to what it calls “unsustainable” and “confiscatory” levels of taxation—specifically, a near-tripling of its annual business rates, according to reports by BBC, GB News, and The Times.
Eurotunnel’s decision, made public in November 2025, comes after it was notified by the UK’s Valuation Office Agency (VOA) that its rateable value, the basis for calculating business rates, would jump by 200%. The company’s business rates, currently standing at £22 million per year, could soar to £65 million by 2028. Even with transitional relief, Eurotunnel expects to pay close to £36 million next year. The looming increase, set to take effect in April 2026, has left the company reeling.
“All our investments, all our plans are becoming unsustainable,” Eurotunnel’s chief executive Yann Leriche told BBC. “As you know, business rates, it’s a property tax. And our property—the Channel Tunnel—has not changed. It’s still the same tunnel, the same terminal, the same trains. Everything is equal. And so to face such an increase… is a real issue for us. Because we know in rail, we invest for the long term.”
The company has not minced words in its criticism, calling the increase “unjustified and confiscatory in nature.” A spokeswoman for Eurotunnel was blunt, stating, “At a marginal tax rate of 75 per cent on new investment, any new investment would be loss making. Eurotunnel has therefore frozen all new rail investments in the UK.”
So, what exactly is being put on ice? According to The Times, Eurotunnel had planned to invest around £15 million in two major freight projects: reopening a terminal in Barking, East London, and launching a new direct freight service from Lille, France. Both projects have now been halted, with Eurotunnel citing the tax hike as the sole reason for the freeze.
The impact of the decision could ripple far beyond Eurotunnel itself. The company typically passes much of its business rate costs on to train operators such as Eurostar, which uses the tunnel to connect London with Paris, Brussels, and Amsterdam. Higher costs for Eurostar could mean higher fares for passengers and freight customers. In a statement, Eurostar said, “A three-fold increase in business rates for Channel Tunnel users for the second time would be at odds with the government’s ambition of economic growth, pioneering European rail connectivity, and encouraging low-carbon rail travel.”
Eurotunnel’s frustration is palpable. John Keefe, the company’s director of public and corporate affairs, told Politico that the VOA’s calculations were opaque and seemed to conflict with the government’s stated ambitions for growth. “Since 2017 we’ve had, over three valuations, a nine-times increase in the valuation,” Keefe said. “It needs to be based on what business can actually pay, generate and pay and still invest. Because if you take all the money in business rates, there’s nothing left for investment. So there’s nothing left for growth.”
The company also pointed out what it sees as an uneven playing field, claiming it is “unduly penalised compared to its competitors whose activities are more carbon-intensive, less-taxed, and some of which are deviating from the social models applicable in France and Great Britain.”
Eurotunnel is not taking the matter lying down. The company has vowed that if the VOA’s plans are confirmed, it will “pursue all measures at its disposal… to assert its rights before the competent authorities, courts and/or tribunals in order to protect its interests and, more broadly, the future of cross-Channel rail transport.”
The Valuation Office Agency, for its part, has defended its process. A spokesperson told BBC and The Times, “The VOA is responsible for non-domestic valuations which reflect changes in the property market. All valuations are carried out by experienced professionals in accordance with industry best practice and legal requirements. The VOA does not determine business rates, and next year’s liability has not yet been confirmed.” The agency also emphasized that it had engaged with Eurotunnel and its advisers “on multiple occasions over the past eighteen months to discuss their valuation and fully explain our approach.” Discussions, the VOA said, remain ongoing, and Eurotunnel has the right to formally challenge the valuation or appeal to the independent Valuation Tribunal if dissatisfied.
The UK Treasury, meanwhile, has sought to reassure businesses facing steep tax hikes. In a statement, a government spokesperson said, “Business rates valuations are set independently by the Valuation Office Agency. We recognise the concerns raised and are providing targeted support for businesses facing the largest revaluation increases. We continue to engage with affected businesses and are exploring options to address concerns ahead of the next revaluation.” The Treasury also noted that it would support firms “hit hardest” by the tax hikes and would continue talks with affected industries. However, it declined to comment on “speculation around future changes to tax policy,” saying that final decisions would be made once the “complete” revaluation picture was understood.
The timing of Eurotunnel’s announcement is no coincidence. The freeze comes just days before Chancellor Rachel Reeves is set to present the Autumn Budget, where the government’s tax and spending plans will be revealed. Business rates are a key source of revenue for the UK government, levied on non-domestic properties like shops, pubs, and offices. But the system has long been a source of contention, with companies across various sectors—supermarkets included—warning that sharp increases could stifle investment and growth.
The repercussions of the tax dispute have already been felt in the markets. Shares in Getlink, Eurotunnel’s Paris-listed parent company, fell 1.2% on Thursday following the news, according to The Times.
Eurotunnel’s move has added fuel to an already heated debate about the future of business rates and the UK’s attractiveness as a destination for infrastructure investment. With the government facing pressure from multiple industries, all eyes are now on Chancellor Reeves and the upcoming Budget. Whether the government will heed the warnings and offer relief—or stick to its guns—remains to be seen. For now, the Channel Tunnel’s future investments are firmly on hold, and the stakes for cross-Channel trade and travel couldn’t be higher.
