Chancellor John Healey has dismissed reports of a planned warehouse tax ahead of the upcoming Budget. The Telegraph revealed that Healey recognizes such a tax could harm high street shops and family businesses. Jason Tarry, chairman of John Lewis and Waitrose, had warned that a tax raid on retailers could lead to widespread closures and damage to high streets. Concerns had grown that the tax might fund business rate cuts for pubs and music venues, as promised by Andy Burnham.
The Chancellor is set to meet with retail and hospitality leaders in Downing Street next week to address their concerns. Despite earlier signals from the Prime Minister that Labour would increase warehouse taxes to fund cuts for businesses like pubs and restaurants, Healey will not propose such a tax in his maiden Budget later this month. UK businesses already face some of the highest property taxes globally, with recent increases in business rates for large warehouses since April 2026.
Other business and finance leaders have also urged caution. Lord O’Neill, an influential economist, advised against additional wealth taxes and higher business levies to prevent economic harm. Stuart Machin, CEO of Marks & Spencer, described Labour’s previous budgets as disasters, while Bank of England governor Andrew Bailey warned of potential economic crises similar to Liz Truss’s 2022 crisis. Taxes on businesses have surged since Labour took power in 2024, including a £25bn annual increase in employers’ National Insurance contributions.
A HM Treasury spokesman emphasized the government’s focus on supporting retailers through growth and investment. The spokesman highlighted business rates cuts, a corporation tax cap, and a £4.3bn package to help manage costs. The Treasury stressed that tax decisions will be announced by the Chancellor during fiscal events, not based on speculation.