Eurotunnel, the operator of the Channel Tunnel, has halted its future investments in the United Kingdom, warning that what it calls unsustainable taxation levels have made any new projects non-viable. 

The company said it had been informed by the UK Valuation Office Agency (VOA) that its business rates would rise by about 200% from 2026, potentially increasing its annual liability from £22 million to £65 million. 

Eurotunnel described the planned rise as unjustified, confiscatory and clearly contrary to the government’s ambitions to grow the economy and stimulate investment. The announcement comes just days before the UK Autumn Budget, when Chancellor of the Exchequer, the Finance Minister in the UK, Rachel Reeves (Labour) will outline tax and spending plans.

“Unsustainable”

Eurotunnel’s chief executive, Yann Leriche, said all of the company’s investments and plans were becoming unsustainable. He told the BBC that business rates are a property tax and that the Channel Tunnel’s physical infrastructure has not changed: the same tunnel, the same terminals, the same trains. He argued that facing such an increase is a serious problem, particularly because rail requires long-term investment. 

Eurotunnel added that when other taxes are included, its total tax burden in the UK could reach around 75% of its UK earnings. The company insists that asset-based taxes, such as business rates, do not take account of earnings and can therefore be crippling.

Eurotunnel said that this unparalleled and unsustainable level of taxation makes any future investment in the UK non-viable. It argued that it is impossible to develop new services, create jobs or support the long-term development of its activities under these conditions. The firm also claims that it is penalised compared with competitors that produce more carbon emissions, pay less tax or operate under different regulatory models, a clear reference to ferry transport. 

The company said it has no other choice but to freeze all future investments in UK rail assets from 2026.

Freight

In particular, the decision affects its freight plans. Eurotunnel has cancelled plans to reopen the Barking freight terminal in east London, which less than a decade ago welcomed the first China–UK New Silk Road train from Yiwu via the Channel Tunnel. 

The firm has also put an end to plans for a new direct freight service between Lille in France and London. The Financial Times reported that the Barking and Lille projects were among those now abandoned.

Eurotunnel will continue to negotiate with the VOA and supervisory authorities until the final valuation decision, expected at the end of March 2026. 

If the proposed rates are confirmed, the firm said it would consider all available measures to protect its interests and the future of cross-Channel rail transport, including possible legal action under the 1986 Franco-British Concession. 

The VOA said it does not determine business rates and that next year’s liability has not yet been confirmed. It added that it has engaged with Eurotunnel and its advisers multiple times over the past eighteen months, and that discussions remain ongoing. Eurotunnel can formally challenge the valuation.

The Treasury said that it would support firms hit hardest by tax increases and that it would continue discussions with sectors affected by the upcoming changes. It also said it does not comment on speculation around future tax policy. Once it has a complete picture of property revaluations, it will be able to make final decisions on support.

Channel Tunnel?

The Channel Tunnel, linking Folkestone in southern England with Calais in northern France, is operated by Eurotunnel, part of the Getlink group. 

Eurostar, its biggest customer, runs passenger services through the tunnel to cities including Paris in Île-de-France, Brussels in Belgium and Amsterdam in the Netherlands. 

Business rates in the UK are a tax on non-domestic properties such as shops, offices, industrial sites and transport infrastructure. New rates and related measures set by the government are expected to come into force in April 2026.

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