Business rates burden on warehousing sector branded 'unfair'
By David Wood | 18th November 2022
Amazon is among the businesses that will be hit the hardest by the Chancellor's move to increase rates at large distribution centres.
Big warehouses are set to pay an average of 27 per cent more in rates following the measures introduced in Jeremy Hunt's Autumn Statement.
Supermarkets such as Tesco and Sainsbury's are also set to be hit by the new measure.
The rates increase, which comes as Mr Hunt introduced £13.6 billion business rates relief for bricks-and-mortar retailers, is designed to tackle the imbalance between high street and online retailers as the Chancellor scrapped the mooted online sales tax.
However, United KIngdom Warehousing Association (UKWA) chief executive Clare Bottle has branded the intended increase in business rates for warehouses 'unfair'.
She said total business rates paid by the retail sector are estimated to fall by 20 per cent, but for large distribution warehouses business rates will rise by a painful 27 per cent.
Ms Bottle said: "The changes in business rates are intended to reflect the growth of the online sales sector, but not all warehouses are involved in ecommerce. What's more, eCommerce is seeing a downturn since the end of the COVID lockdowns."
She added: "Retail shops on the high street, who are seeing a fall in bills, will get the full reduction as a result of transition relief reforms. Online marketplace warehouses, on the other hand, will pay higher bills, because of the revaluation, even though our sector has seen bills go up, including increased wages, energy costs and equipment like MHE and racking. Warehousing is facing a disproportionate increase in business rates.
"The transitional relief is intended to make increases more manageable, with caps at 5 per cent, 15 per cent and 30 per cent for small, medium and large properties. But most warehouses fall into the latter category... and therefore could still potentially be seeing up to 40 per cent increases in their rates bills. The 30 per cent cap is very high and not of huge benefit to most logistics properties. This is a big disappointment and simply not fair."
On a more positive note, UKWA has welcomed the Chancellor's comments on the need for energy independence combined with energy efficiency - independence to ensure that the country is not at the mercy of international gas prices and the threat of energy blackmail, efficiency to reduce demand and climate impact.
Ms Bottle added: "Jeremy Hunt has declared that Britain is a global leader in renewable energy, with our renewable energy production growing faster than any other large country in Europe last year.
"Following our major report on the potential benefits to the UK (as well as to the logistics sector) of solar PV on warehouse rooftops, we are hopeful of pushing on an 'open door' to engage government in discussion on support for more businesses in embracing solar power."
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