Amazon and Ocado set to pay more to store parcels in the UK
Key Points
- PwC expects a new business rates surcharge on large distribution warehouses
- The cost would fall on online retailers and logistics operators
- The money would fund relief for high street retail, hospitality and leisure
- The mansion tax threshold could drop from £2 million to £1.5 million
- Chancellor John Healey delivers the Autumn Budget on 28 October
Large online retailers could face a new tax on their UK warehouses, accounting firm PwC has warned. PwC said Chancellor John Healey could introduce a new business rates surcharge on large distribution warehouses in the Autumn Budget on 28 October.
The surcharge would land on major online retailers and logistics operators, which run the warehouses that store and ship online orders for companies such as Amazon and Ocado.
PwC said the money would help fund continued business rates relief for retail, hospitality and leisure businesses on the high street.
“To help fund this, the Chancellor may target reliefs currently available to ‘anti-social’ premises such as vape shops, and introduce a new surcharge on large distribution warehouses, a move that would land squarely on major online retailers and logistics operators,” said Phil Vernon, head of business rates at PwC UK.
Vernon said a full overhaul of business rates looked unlikely in this Budget, but that a rebalancing between sectors was very much in play.
The firm expects the Chancellor to extend Small Business Rates Relief and offer more targeted help for pubs, music venues and other community spaces.
“There would be a trade-off here – supporting embattled town centres by shifting cost onto sectors seen as more resilient,” said Vernon.
PwC added that mayors could receive a direct share of business rates revenue from 2027, tying local growth incentives to regional decision-making.
Mansion tax and frozen thresholds
The firm also expects the Chancellor to consider lowering the threshold for the High Value Council Tax Surcharge from £2 million to £1.5 million.
That change would double the number of homes the so-called mansion tax affects, with homeowners in London and the South East taking the biggest hit.
The surcharge comes into force in April 2028 as a tiered annual flat fee, and PwC said a premium for overseas buyers could also follow.
Income tax thresholds will stay frozen until April 2031, which the Office for Budget Responsibility estimates will raise over £55 billion in 2030/31.
PwC said movements in bond yields and interest rates had roughly halved the government’s fiscal buffer to around £14 billion.
“That points to a Budget about buying time: doing enough to shore up the public finances for now, while leaving the bigger choices for later,” said Jake Finney, senior economist at PwC UK.
