The Government’s announcement in 2024 that they would be phasing out the quite generous relief given to the retail, hospitality and leisure sectors during Covid-19 was met with disappointment from the operators in these sectors. However, more concerning was the proposal to level the playing field between high street retailers and the online retail giants by adding a supplement to the rates bills of the latter.
Business Rates as a tax on the occupation of commercial property is perpetually unpopular, but for many years has perhaps been more of an inconvenience than a major concern.
This concern was escalated with the subsequent proposal to add a ‘large property supplement’ to the rates bills of any occupier with a rateable value of £500,000 or more in England, or £100,000 or more in Wales.
For this reason, there was plenty of speculation ahead of November’s Budget about what this might mean for the warehouse sector. In respect of rising rateable values following this years revaluation, there has been uncertainty over whether the basic multiplier used to calculate rates bills would go up or come down, the impact of the ‘large property supplement’, and the uncertainty over whether there would or would not be any transitional relief to cushion the impact of sizeable increases in notional rates bills.
Whilst the autumn Budget was one of the latest we have seen in many years, and the publication of the draft 2026 Rating List was similarly delayed leaving businesses with only a few weeks to prepare for the new liabilities which go live from 1st April 2026, the impact of all of the above on the warehousing sector is now coming into focus.
Following publication of the draft 2026 Rating List, average rateable values for warehouses in England, Wales and Scotland have increased by 21%, 23% and 13% respectively.
The annual multipliers have come down by more than expected in England and Wales, but less than expected in Scotland. Note, however, that the new hugely complex liability calculation system includes 19 possible levels of annual multiplier in 2026/27 throughout England, Wales and Scotland, compared to nine in 2025/26.
The much feared ‘large property supplement’, which could have added as much as 20% to rates bills has been set at a ‘mere’ 5.8% increase in England and 2.8% in Wales.
Also, each jurisdiction has introduced some form of transitional relief. So, taking this all together, what does this mean for the warehousing sector? With rateable values in England having risen by an average of 21%, as mentioned above, the average rates bill will be restricted to an 8.67% increase.
Properties which will benefit from transitional relief, for instance where their rateable values have risen sharply, will see above inflation increases in their rates bills in 2027/28 and possibly in 2028/29.
The general consensus of the revaluation and the Budget for the warehousing sector is that it could have been much worse. But, then again, in light of the vital contribution that the sector makes to UK plc, arguably the outcome should have been far better.
The opportunity to appeal against existing 2023 List rateable values ends on 31st March 2026, so do ensure your existing rateable values are reviewed before then. The window to appeal against the forthcoming 2026 rateable values will open on 1st April 2026.
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