Government cuts to property taxes for high street shops and pubs risk backfiring and damaging business supply chains, a major employers’ group said today. In a submission to the Treasury, the UK Warehousing Association (UKWA) said that reduced business rates for retail, hospitality and leisure (RHL) businesses were not specifically targeted at those facing hardship, and had to be paid for by other companies, whether they could afford it or not.
Under the Government’s plans, premises with a value for business rates purposes of more than £500,000 will pay a higher ‘multiplier’ on this tax, while there will be a cut for RHL properties worth less than £51,000.
The Treasury claims the policy will capture “the majority of large distribution warehouses, including those used by online giants”. However, the UKWA, which represents 1,000 companies, collectively managing over 200 million square feet of logistics space, pointed out that warehouses will bear a “heavy burden” whether they are used for online retail or not.
Although the trade body said it understood Ministers’ desire to support struggling high streets, it warned that warehouses operated on tight margins. In an economy not growing at the pace hoped “higher business rates could easily translate into lower employment and investment growth”, the UKWA told the Treasury.
Clare Bottle, CEO of the UK Warehousing Association, said:
“Helping the high street is a laudable goal, but we are very concerned that this policy mistakes how business supply chains work. Warehouses don’t just serve online retailers – in fact more space is still taken by high street and food retail.
“Hiking the tax on all premises above £500,000 will mean extra costs in the supply chain, and ultimately that will feed through to prices in shops, pubs and leisure venues, even if they are getting a cut in upfront rates.
“We welcome other measures the Government is proposing to make the business rates system work better, but we urge them to keep this particular policy under review, and if doesn’t help high streets, to scrap it.”
UKWA is exhibiting at Multimodal on stand 7014 - and also hosting a pavilion of member companies
