Logistics UK says government proposals would saddle logistics and warehousing operators
A sweeping overhaul of business rates is poised to “prime the inflation pump”, industry leaders have warned, arguing that the reforms risk clobbering the very companies that keep Britain’s high streets running.
Business group Logistics UK says government proposals set out in the “Transforming Business Rates” paper would saddle logistics and warehousing operators with millions in extra costs, as rates rise for properties valued above £500,000. Crucially, the increase would apply regardless of a building’s purpose or a company’s ability to absorb the hit — a move designed to subsidise tax cuts for smaller retail and hospitality firms.
But according to Logistics UK’s Acting Chief Executive Kevin Green, targeting large premises such as warehouses is a serious misstep. He warns that if ministers want to support high-street traders, they cannot ignore the supply chains that keep shop shelves filled. As Green puts it, imposing a “punitive tax regime” on logistics firms would simply drive up prices “for businesses and consequently the end consumer”.
Green also pushes back against the idea that warehousing is the preserve of major online retailers, stressing that roughly 5,000 PAYE or VAT-registered warehousing companies operate across the UK, the majority of them SMEs. These firms remain vital regional employers — particularly in the Midlands, North West, and Yorkshire and the Humber — and typically work on slim margins. Passing increased tax costs down the supply chain, he says, will be unavoidable.
He argues that a blanket tax increase based solely on rateable value fails to reflect profitability or financial resilience, placing a “disproportionate burden” on businesses essential to the wider economy — including the very sectors the reforms claim to protect.
With the Autumn Budget looming, Logistics UK is urging the Treasury to rethink. Without a more balanced approach, Green cautions, the proposals risk deterring investment in logistics infrastructure and fuelling yet more inflation at a delicate moment for the UK economy.