The Business End of Business Rates and Warehousing

Business Rates, as a tax on the occupation of commercial property, are perpetually unpopular, but for many years they have perhaps been more of an inconvenience than a major concern for most warehouse occupiers.

The Government’s announcement in 2024 that it would phase out the generous relief granted to the retail, hospitality, and leisure sectors during Covid-19 was met with disappointment from those industries. More concerning, however, was the proposal to level the playing field between high street retailers and online retail giants by introducing a supplement to the latter’s rates bills.

This concern intensified when it was proposed that the ‘large property supplement’ would apply to any occupier with a rateable value of £500,000 or more in England, or £100,000 or more in Wales.

Uncertainty Ahead of the Budget

As a result, there was considerable speculation ahead of November’s Budget about the implications for the warehousing sector. With rateable values rising following the 2026 revaluation, uncertainty centred on whether the basic multiplier would increase or fall, how the large property supplement would apply, and whether transitional relief would be introduced to soften the impact of significant increases in notional rates bills.

While the autumn Budget was one of the latest in many years, and the draft 2026 Rating List was also published later than expected, leaving businesses with only a few weeks to prepare before the new liabilities take effect on 1 April 2026, the picture for the warehousing sector is now becoming clearer.

What the Numbers Tell Us

Following publication of the draft 2026 Rating List, average rateable values for warehouses have increased by 21 percent in England, 23 percent in Wales, and 13 percent in Scotland. In England, the highest recorded increase was 551 percent, while the largest reduction was 48 percent.

Annual multipliers have fallen by more than expected in England and Wales, but by less than anticipated in Scotland. It should be noted, however, that the new liability calculation system is significantly more complex, with 19 possible multiplier levels across England, Wales, and Scotland in 2026/27, compared to nine in 2025/26.

The much-feared large property supplement, which had the potential to add as much as 20 percent to rates bills, has been set at a 5.8 percent increase in England and a 2.8 percent increase in Wales.

Each jurisdiction has also introduced transitional relief. For 2026/27, rates bill increases for properties with rateable values above £100,000 will be capped at 30 percent in England, 33.33 percent in Wales, and 37.5 percent in Scotland.

What This Means For Warehouse Occupiers

Taking all of this together, the impact on the warehousing sector is more measured than many had feared. In England, where rateable values have risen by an average of 21 percent, the average rates bill increase will be restricted to 8.67 percent.

Around 21 percent of warehouses in England will see their rates bills decrease. A further 56 percent will experience increases of up to 20 percent, while 23 percent will see increases of more than 20 percent, but no greater than 30 percent due to transitional relief.

Properties benefiting from transitional relief, particularly those with sharply rising rateable values, should be aware that above-inflation increases may continue into 2027/28 and potentially 2028/29.

Final Reflections

The general consensus following the revaluation and the Budget is that, for the warehousing sector, the outcome could have been significantly worse. However, given the vital contribution the sector makes to UK plc, there is a strong argument that it could, and perhaps should, have been better.

The opportunity to appeal against existing 2023 List rateable values closes on 31 March 2026. The window to appeal against 2026 rateable values will open on 1 April 2026, and occupiers may wish to review their position ahead of these deadlines.

David Parker
Director & National Head of Rating Business Rates, Savills