Increasing taxes on large warehouses could force offshoring of retail supply chains, putting UK jobs at risk and negatively impacting sustainability efforts.

Operators of large distribution centres are already feeling the pressure of a high-value multiplier, which came into force on 1st April 2026, as well as rising employment costs. Hitting them with even higher business rates could leave many companies with little choice but to shift warehousing and fulfilment overseas in search of cheaper, more manageable overheads.

The current economic climate means businesses will find it difficult to absorb any higher rates. Hiking selling prices to accommodate rising levies is a dead-end. Consumer finances are already squeezed, and shoppers simply can’t afford to pay more.

Countries across Europe, such as Poland and Hungary, offer incentives to attract logistics investment. They want retailers to base their large warehouses there, and the offer of any tax breaks, grants or subsidies could become a lot more attractive than paying higher rates it the UK. Unfortunately, this could add unnecessary mileage to supply chains, as goods are rerouted into the UK, which doesn’t fit with a circular economy.