Business rates rarely make front-page news. Until they do. In recent weeks, independent bookshops have warned that hundreds of stores face average annual increases of more than £4,500 from April, forcing them to sell over 1,000 extra books a year simply to stand still. Hospitality leaders have voiced similar concerns. Pubs, in particular, argue that the system remains stacked against them, despite transitional reliefs designed to soften the blow.
At the heart of this debate lies a longstanding policy choice: the Retail, Hospitality and Leisure (RHL) relief. Introduced during Covid and extended several times since, RHL has provided substantial discounts to high street businesses. The central question has always been how that relief is funded.
Last year, a heavyweight industrial and logistics coalition warned that there was a real risk of relief for one group of ratepayers being funded by another: specifically, occupiers of large properties, including warehouses. When the Autumn Budget proposals emerged, the logistics sector highlighted the potential for disproportionate impact on large distribution centres.
It is worth remembering that before the pandemic there was no RHL relief at all. UKWA’s position is straightforward: the business rates system should not permanently favour one class of property over another. Warehouses are already absorbing rising labour costs, energy bills, automation investment and higher National Insurance contributions. Property taxes in the UK are among the highest in the developed world, and our system is more centralised and expensive than many European equivalents.
We are not arguing against support for the high street. But shifting the burden onto large logistics buildings risks creating distortion in a sector that underpins every other. The goods sold in bookshops, pubs and restaurants pass through distribution centres first. Increasing costs at that point in the chain has consequences that ripple across the economy.
The scaling back of proposals to place a heavier burden on larger property occupiers is therefore a welcome recalibration. It also illustrates something important: retailers will always make the case for the high street and hospitality will speak up for pubs. Logistics must do the same.
New business rates take effect next month. If your new rates bill feels unaffordable or out of step with market reality, please do get in touch with UKWA. We work with experienced rating specialists who can advise on whether a challenge is appropriate.
Meanwhile UKWA will continue to engage constructively with HM Treasury and the Valuation Office Agency to argue for a system that is fair, predictable and properly resourced. If government chooses to support one part of the property market, it must ensure the cost does not fall disproportionately on another. Especially one so fundamental to growth, resilience and the everyday functioning of the UK economy.
Clare Bottle
UKWA, CEO
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