West Midlands industrial and logistics businesses face a triple whammy in 2026 with business rates facing an average increase of 21% due to the upcoming 2026 revaluation.
On top of the increase to Employers’ NI and increase in the National Minimum Wage, industrial and logistics companies face a disproportionate hit in the 2026 revaluation, according to Ben Truslove, joint managing director of commercial property agents John Truslove.
He explained: “Industrial units and large warehouses in England are facing significant business rates increases, with average hikes of 21% anticipated due to the upcoming 2026 revaluation.
“The surge is driven by a combination of high demand for logistics space and new ‘super tax’ multipliers targeting properties with a rateable value (RV) over £500,000.”
These changes, designed to shift the burden away from high-street shops, mean the industrial sector will bear a greater share of the total business rates, which is expected to rise by a total of £1.7 billion in the 2026 revaluation.
Ben Truslove is urging affected companies to take urgent professional advice.
“Businesses can challenge their rateable value if they believe it is incorrect and we are on hand to assess this and negotiate an appeal with the Valuation Office Agency (VOA) where a reduction is appropriate.”
The VOA is currently updating rateable values based on 1 April 2024 market levels. The industrial and logistics sector has seen continued rental growth, leading to higher valuations.
From 1 April 2026, properties with a rateable value of £500,000 or more will be subject to a higher standard multiplier. This intended to fund tax cuts for smaller retail, hospitality and leisure properties.
But larger distribution warehouses and manufacturing plants are expected to be heavily impacted, with some estimates suggesting a £266 million increase in annual liability for large distribution warehouses and £85 million for manufacturing plants.
Mr Truslove warned that these reforms will hit the sector, adding millions to operational costs and potentially driving inflation.
He pointed out that areas with high concentrations of logistics hubs are particularly vulnerable to these increases.
There will be some time for companies to adjust. The government is introducing a 30% cap on increases for larger properties to phase in the new rates.
Ben Truslove said: “The message is clear. Company directors need to ensure they understand their current position and how this is going to change after 1 April 2026.
“They need to plan for increases and take professional advice on whether they can mount a challenge to their new rateable value. A successful challenge could mean a saving of tens of thousands of pounds.”
He cited the example of a successful challenge by John Truslove Chartered Surveyors to the rateable value of a major West Midlands manufacturing plc, where a reduction of £130,000 was successfully negotiated and backdated to 1st April 2023.
“Even for SMEs, it could mean an extra £500 a month – which is a real challenge for businesses that are already struggling to make a profit.”
And he added that the government had also introduced another level of administrative complexity, making it even more complicated and time consuming for businesses to apply for reductions in their rateable value.
“In the past it was straightforward for a business to nominate a firm of chartered surveyors as its professional adviser, and they would take it forward from there.
“Now, officers such as the managing director and financial director must start the process by creating a Government Gateway account before their professional advisers can proceed.”
Companies seeking an initial assessment of their own situation, can contact [email protected], or call 01527 584242.