Retailers including supermarket giants Tesco, Sainsbury's and the Co-op have lost a long-running court battle over business rates bills on ATM cash machines attached to shops.
A legal ruling published on Thursday upheld a decision in 2013 that cash machines built into the front of a shop or petrol station should have a separate business rates bill.
Retailers had hoped to overturn the decision to claw back £200m in rebates for past rates paid and also now face what experts term a "mammoth £206m bill for the next five years under the recent revaluation".
There are also concerns that small shops and independent petrol forecourts may be forced to close ATMs or start charging for cash withdrawals.
It comes as the sector is already facing contentious rate rises under this month's revaluation.
Figures compiled by rents and rates specialist CVS showed that rates bill hikes from April 1 are costing retailers £39.m a year - or nearly £2,800 on average for each ATM.
The figures from rents and rates specialists CVS show the number of cash machines being liable for business rates has lifted from 3,140 in 2010 to 14,068 this year.
The judgment, which was made in the Upper Tribunal last week and published yesterday, follows a long-running case brought by retailers, including major supermarkets Sainsbury's, Tesco and the Co-operative Group, as well as non-bank ATM operator Cardtronics Europe.
In 2013 the government decided to charge rates on 'hole in the wall' cashpoints, which saw bills sent to thousands of retailers in 2014, backdated to the start of the last tax regime in April 2010.
Almost one in six of the more than 196,000 current business rates appeals lodged with the Valuation Tribunal Service relate to cash machines, according to a recent freedom of information request by CVS.
CVS has called the move a "stealth tax" and said it could deprive many communities of vital access to cash, given the number of bank branch closures across the UK.
While ATMs attached to retailers are having to pay rates, the regime does not apply to free-standing cash machines within stores.
But it affects many thousands of hole-in-the-wall ATMs.
A spokesman for CVS said retailers are expected to lodge an appeal against the ruling.
He said: "Given the importance of the decision, both sides indicated that they would wish to appeal an adverse decision to the Court of Appeal. As such the battle looks set to rumble on.
"However, in the short term, there won't be any respite in tax liabilities which is going to hit small retailers and forecourts the hardest."
ACS chief executive James Lowman said: "Sadly this ruling will make it harder for retailers to offer free-to-use cash machines that are accessible from the outside of their store.
"This will have wide ranging and damaging implications not just for convenience stores, but also for small businesses, markets and other services on high streets and in neighbourhoods where this is often the only local free source of cash."
He added the ruling shows "what a mess the business rates system is in" following the recent revaluation.