The warehousing sector is urging the Chancellor to freeze business rates in the forthcoming Budget, warning that further increases would raise costs across UK supply chains and ultimately feed through to consumers.
In its submission to the Treasury, the UK Warehousing Association (UKWA) said warehouses had already been hit hard by this year’s business rates changes. New analysis by the trade body shows that seven in ten large distribution warehouses are caught by the new high-value multiplier, which applies to properties with a rateable value of £500,000 or more.
Four in five warehouses saw their business rates bills rise in April. A large warehouse can face a business rates multiplier up to a third higher than that applying to high street shops.
During his campaign for the Labour leadership, Andy Burnham mooted further increases in property taxes on warehouses to fund cuts for businesses like pubs. Since becoming Prime Minister, however, his Government has identified other potential sources of revenue, including vape shops and VAT reforms for online marketplaces.
The UKWA is calling on the Chancellor, John Healey, to pursue those alternatives and rule out further hikes on warehouses.
In its Budget submission, the association, which represents more than 1,000 companies across the warehousing sector, also called for measures to make it easier for businesses to invest in green upgrades, alongside support for skills development and technology adoption.
Clare Bottle, CEO of the UKWA, said:
“The Chancellor has rightly said that businesses have been carrying the burden of rising costs. For warehousing, business rates have become an increasingly heavy part of that burden.
“Our sector has repeatedly been singled out as a convenient source of additional revenue, but warehouses do not sit apart from the rest of the economy. They are part of virtually every supply chain in Britain. Whether goods are bought online or on the high street, they almost certainly pass through a warehouse somewhere along the way. Raise costs for our members, and you push up inflation for consumers.
“This Government has already taken some welcome steps to recognise the importance of logistics, including planning reforms and the appointment of a Minister for Aviation, Maritime and Logistics. A further increase in business rates on warehouses would undermine that pro-growth agenda.
“Our message to the Chancellor is simple: give businesses certainty, freeze the rates burden on warehousing, and allow the sector to invest in the people, technology and infrastructure Britain needs.”
