Today’s Autumn Budget arrived against a backdrop of weak economic growth and high government borrowing. While Chancellor Rachel Reeves promised “fair and necessary choices” to drive long-term growth, the warehousing and logistics sector received a mixed and in some areas disappointing et of measures.
Business Rates Surcharge: ‘A Cheap Shot’ at Warehousing
Reeves’ decision to introduce a business rates surcharge for properties over £500,000 was justified by pointing to ‘warehouses of online giants’.
Clare Bottle, UKWA CEO, criticised this as a ‘cheap shot’, highlighting that consumer demand not corporate excess has driven the growth of warehousing. Crucially, the surcharge hits all large warehouses, whether they support e-commerce, pharmaceuticals, defence, manufacturing, or the very high-street retailers receiving rate cuts.
The Treasury expects to raise £270m from 1,900 warehouses between 2026-29. For many operators already under pressure, this will be viewed as another cost-increasing budget.
Relief Measures offer Limited Clarity
The Budget includes £3.2bn of transitional relief, though it’s unclear how much will reach warehouses. A new consultation on business rates and investment may offer long-term reform, but any benefit is some way off.
The removal of customs duty exemptions on imports under £135 is another cost and compliance pressure for 3PLs handling high-volume, low-value goods.
Clare Bottle, UKWA CEO
Where the Budget Helps
There were a few positives worth noting:
- VAT relief on goods donated to charity, removing a barrier long highlighted by UKWA members.
- Fully funded apprenticeships for under-25s in SMEs, plus guaranteed paid work for 18-21-year-olds after 18 months.
Both measures support workforce development and sustainability efforts.
The Bottom Line
The Budget didn’t include any big surprises, but it also didn’t offer much real help for a sector that relies on lots of staff, large buildings, and already has high running costs.
For warehousing and logistics businesses, the next few years will need careful planning, as costs are likely to keep rising and business rates will become more expensive. The new government consultation is an important chance for the industry to argue for a fairer system in the future.
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