Britain's warehousing sector has avoided a further business rates increase in the Autumn Budget, but industry leaders warn that rising costs continue to squeeze operators
Britain's warehousing industry has escaped a further business rates increase in the Autumn Budget, but industry leaders warn that rising fuel, employment and property costs continue to put pressure on businesses.
The UK Warehousing Association (UKWA) has welcomed the Chancellor's decision not to increase the higher business rates multiplier applied to large properties, following weeks of concern about further tax rises.
The decision offers relief to warehouse operators and logistics businesses, which play a vital role in moving food, agricultural produce and other goods through Britain's supply chains.
However, the association warned that seven in ten large distribution warehouses remain subject to the high-value business rates multiplier, leaving many operators facing substantial property tax bills.
UKWA Chief Executive Clare Bottle described the outcome of the 28 October Budget as a welcome reprieve for the sector.
"After weeks where it seemed almost inevitable that business rates on large properties like warehouses would go up again at the Budget, today was a bullet dodged for our sector."
The association had campaigned against further increases, arguing that higher property taxes on warehouses would ultimately feed through to businesses and consumers.
Ms Bottle said the industry had successfully made the case that additional charges would increase costs throughout supply chains.
"The UKWA has led the charge to persuade the Government that a rise in property taxes for warehouses would inexorably lead to higher costs for business and consumers, and we are pleased our argument has been heeded."
Despite the decision, the association warned that the existing business rates system continues to place significant financial pressure on warehouse operators.
The high-value multiplier applies to properties in England with a rateable value of £500,000 or more, including many large distribution centres.
The Budget also extended the Business Rates Transitional Relief Supplement for another two years, maintaining an additional charge on affected businesses.
The supplement, set at 1p in the pound, will continue through 2027/28 and 2028/29 to help fund relief for businesses facing substantial increases in their rates bills.
The UKWA expressed concern that the policy would continue to place pressure on sectors outside retail, hospitality and leisure.
Ms Bottle warned that warehouse businesses were already contending with high fuel costs, employment expenses and other operating pressures.
She argued that extending the supplement would maintain an uneven burden between different parts of the economy, particularly businesses outside sectors receiving targeted support.
The association also welcomed elements of the Budget aimed at improving employment and skills.
These included £100 million for local apprenticeship services, which the UKWA said could help employers recruit and train workers as part of wider vocational education reforms.
The organisation also supported the government's commitment to work with private businesses to strengthen Britain's defence-industrial base.
It said warehousing and logistics operators could play an important role in supporting that expansion.
However, the UKWA stressed that further action was needed beyond the immediate Budget announcements.
One priority is improving access to the electricity grid, allowing warehouse operators to invest in solar panels, electric vehicle charging infrastructure and other energy upgrades.
The association warned that delays in grid improvements could hold back investment and make it harder for businesses to modernise their operations.
It also called for forthcoming changes to employment law to reflect the practical challenges faced by employers operating warehouses and distribution centres.
Ms Bottle said: "The Budget announcement is one day. Over the coming months the Government must speed up improvements to the electricity grid, allowing warehouses to make upgrades including solar panels and electric vehicle charging, and make sure employment law changes take account of the realities of running a business."
The UKWA represents more than 1,000 member businesses operating approximately 400 million square feet of warehousing and distribution space across the country.
According to the association, the wider warehousing sector contributes more than £28 billion to the UK economy and supports around 760,000 jobs.
Although the decision not to raise the high-value multiplier has been welcomed, the industry is warning that continued pressure from property taxes, energy costs and employment expenses could affect businesses throughout Britain's supply chains.