Amazon faces soaring costs as Chancellor hikes warehouse rates

Amazon warehouse
Amazon is facing a soaring rates bill
// Amazon is set to be one of the worse hit retailers after a business rates rise for large distribution centres was unveiled in the Autumn Statement
// Big warehouses will pay on average 27% more in rates

Amazon is among the business that will be hit the hardest by the Chancellor’s move to increase rates at large distribution centres.

Big warehouses are set to pay an average of 27% more in rates following the measures introduced in Jeremy Hunt’s autumn statement.

Property advisor group Altus forecast that Amazon would face a 74% rate increase on its Tibury warehouse in Essex, up from £7.1 million to £12.3 million a year, The Guardian reported.

Supermarkets such as Tesco and Sainsbury’s are also set to be hit by the new measure.

The rates increase, which comes as Hunt introduced £13.6 billion business rates relief for bricks-and-mortar retailers, is designed to tackle the imbalance between high street and online retailers as the Chancellor scrapped the mooted online sales tax.

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However, Clare Bottle, chief executive of the United Kingdom Warehousing Association, whose members include Amazon, Clipper Logistics and DHL, said the tax increase was “unfair”, “painful” and “disproportionate”.

She said: “Warehouses are big buildings and they are already paying their fair share.”

Bottle said that the move ignored the low margins that many warehouse companies work to.

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