UKWA challenges government over unfair business rates rise

London, UK: Warehouses will face higher costs whilst also being denied the relief package offered to other sectors under government plans.

The UK Warehousing Association has flagged its concern about the sharp rises in business rates.  Clare Bottle, chief executive, UKWA, has requested an urgent meeting with HM Treasury to map out how to improve business protection for warehouses.

Clare Bottle, chief executive, UK Warehousing Association

“In the wake of the Autumn Statement, the publication of the Draft List for the 2023 Revaluation of Business Rates on Tuesday sent shockwaves through UKWA’s 900-strong membership”, the association said.

UKWA has written to the Chancellor of the Exchequer pointing out the damage these new business rates will cause the sector, and the wider economy.

“UKWA also seeks to remedy the lack of understanding about how the warehousing sector operates, referring to our broken a planning system and the sector being overlooked time and again for business rates relief.” it said.

UKWA argues:

  • Vacancy rates across the UK market for Industrial & Logistics property are at an all-time low.  It is government’s failure to fix the planning system which has caused this, driving rateable values up by skewing the supply and demand of warehouse property.
  • The government’s chosen antecedent valuation date of April 2021 is unfair: warehousing was propping up the economy during lockdown and consequently property values were disproportionately high compared to other sectors, such as high street retail and offices where rental prices were correspondingly depressed by the economic impact of the pandemic.  Basing business rates on these property values puts warehousing at a significant disadvantage.
  • In the past we have seen transitional relief caps of 10% + inflation, so the 30% cap for large buildings is much less helpful than we hoped for and the assumption that companies with larger buildings need less support indicates contempt for our sector.
  • Retail, leisure and hospitality already benefiting from 50% rates relief which will now increase to 75%, yet no such relief has been offered for warehousing, which is a key component of the supply chains for those other sectors.

Bottle believes the warehousing sector is being penalised unfairly by HM Treasury’s business rates policy and said urgent intervention is required.

“Third-party warehousing service-providers with typically low profit margins are facing untenable increases in rents, labour costs and energy costs already. Adding such eye-watering increases in business rates with so little transitional relief, will force some out of business, leading to supply chain disruption, which has the potential to damage the economy,” Bottle said.