WarehousingIreland.ie – ‘Warehouse tax’ puts Burnham’s cost of living pledge at risk

‘Warehouse tax’ puts Burnham’s cost of living pledge at risk

Jul 25, 2026 Warehousing Ireland News, UKWA/AIWA, Warehousing Comments Off on ‘Warehouse tax’ puts Burnham’s cost of living pledge at risk

Increasing property taxes for warehouses will lead to higher prices for consumers, a leading business group has warned.

In a letter to the new Prime Minister, the UK Warehousing Association (UKWA) said that higher business rates for distribution and fulfilment centres, which supply goods to shops, pubs and households, would inevitably feed into inflation.

In recent weeks, Burnham has pledged on several occasions to increase tax on warehouses of ‘online giants’, and out-of-town developments. Clare Bottle, CEO of the UKWA criticised the proposals, pointing out that tax on large warehouses had already been significantly increased in April this year, in order to pay for a cut for smaller shops and pubs.

All retailers, whether online or on the high street, use warehousing. Companies that store and distribute goods for retailers, hospitality and other sectors operate on thin margins, Bottle said. Increasing their costs would have a knock-on effect for the prices people pay, whether they are shopping in-store or online.

The UKWA urged Burnham to hold off further changes to business rates until the impact of the recent reforms could be fully assessed.

Clare Bottle, CEO of the UK Warehousing Association, said:

“We welcome Andy Burnham’s focus on reindustrialisation. In order to achieve economic growth, he must recognise warehousing as essential infrastructure. That means no further increases in business rates, faster progress on apprenticeships, and a planning system that gives us the right warehouses in the right places.

“Business Rates have become grossly complex, prone to unpredictable swings and now act as a major inhibitor to investment. For a sector like warehousing that has to operate large buildings, recent changes have been particularly punishing. The new surcharge on premises above £500,000 catches distribution centres indiscriminately, whether they support online retailers or supply the high street.

“The Prime Minister’s proposal would make a bad situation even worse. Endless tweaking of thresholds and reliefs, supposedly paid for by warehouse of ‘online giants’ will only mean more money for valuation consultants and higher costs for the consumer.”

Excerpts from the letter from Clare Bottle to the Prime Minister:

“Modern warehouses are technologically enabled facilities, where employees increasingly work alongside automation, robotics and AI-supported warehouse-management systems. The sector creates entry-level jobs, provides opportunities to develop new skills and enables people to build satisfying long-term careers. There are still misconceptions about warehouse employment, but having worked in the sector for more than 30 years, I know how proud people are of the critical role they play in keeping the economy moving.

“We ask that the role and needs of warehousing are fully represented as your programme for economic reform and regional growth develops.

“Warehousing is intrinsically property-intensive, making business rates a substantial and unavoidable fixed cost. We were therefore very concerned by your recent suggestion that warehouses and major out-of-town premises might be required to pay higher business rates to fund further relief for pubs and high-street businesses.

“Nearly every major retailer now follows an omnichannel strategy, selling through both shops and online.

“It is therefore not realistically possible to identify consistently, through the business-rates system, which individual warehouses are used by ‘online giants’.

“For third-party logistics operators, additional property costs must ultimately be absorbed through lower margins, reflected in higher prices or recovered through reduced investment and employment. None of those outcomes supports reindustrialisation, productivity, lower consumer prices or thriving high streets.

“We therefore ask you to confirm that no further warehouse-specific increase will be introduced until the reforms implemented in April 2026 have operated for a full year and the Treasury has published a comprehensive assessment of their effects,”