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Last checked at 
22 Mar 2012 07:00
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FOR IMMEDIATE RELEASE 22 March 2012
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Safestore Holdings plc("Safestore" or "the Company")
Safestore Holdings plc is the self storage market leader in the UK and Paris.
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Budget Response
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Safestore Holdings plc announces today that following a proposed change to legislation in yesterday's budget, the Group would potentially be required to charge VAT to its customers from 1 October 2012. The rental of self storage units is currently exempt from VAT as a licence to occupy land in the same way as the rental of commercial property.
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HMRC has invited consultation on this proposed change and we, with the help of our advisors, intend to actively engage in discussion with them.
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This proposed legislative change would have an industry wide impact in the UK. However, were VAT to become levied on self storage it would have no impact on our Parisian business which accounts for around 25% of the Group's revenues. In the UK, around 50% of our let space is taken by business customers and we would expect the impact to be limited in this sector as many businesses will simply reclaim the VAT.
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Our customer licence agreements allow us to vary pricing with 28 days notice and we would therefore expect to be able to adapt our business model to mitigate the impact of the proposed tax changes.
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Over the past 10 years we have not been recovering VAT on our capital expenditure given that self storage is exempt. Any future implementation of this change would require the reimbursement of a significant sum to the Group under the Capital Goods Scheme, the timing of which would be subject to agreement with HMRC.
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Safestore will continue to update the market as appropriate.
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Ends
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Enquiries
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Safestore Holdings plc | 020 8732 1500 |
Peter Gowers, Chief Executive Officer | |
Richard Hodsden, Chief Financial Officer | |
www.safestore.com | |
Hudson Sandler | 020 7796 4133 |
Nick Lyon / Wendy Baker |
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Notes to editors:
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Β·; | Safestore is the UK's largest self storage group with 133 stores. They include 97 wholly owned stores in the UK and 24 wholly owned stores in the Paris region together with 12 stores under management in the UK. Β |
Β·; | The Company provides storage to almost 45,000 personal and business customers. Β |
Β·; | Safestore (excluding Space Maker) has a maximum lettable area ("MLA") of 5.3 million sq ft (including the expansion pipeline stores) of which 3.19 million sq ft is currently occupied. Β |
Β·; | A strong balance sheet and operational cash flow allow Safestore to invest in continual improvements in the operational performance of its stores, in new store development and acquisitions where appropriate. Β |
Β·; | Safestore employs around 550 people. |
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