The UK Autumn Budget outlines a mixed outlook for the cold chain sector, with partial support for capital investment but rising operating costs across business rates, employment, and fuel. Industry representatives say the combined measures will increase financial pressure on temperature-controlled logistics.
Cold Chain Federation CEO Phil Pluck said, "The last two budget outcomes have proved challenging for industry and, of course, the cold chain," noting that higher taxes and employment costs could increase food and pharmaceutical inflation.
© Cold Chain Federation
Business rates
A new higher-rate business-rates multiplier will apply from April 2026 to properties with a rateable value above £500,000. The multiplier will rise to 50.8p in 2026–27. Updated valuations have pushed many cold-storage facilities into the higher-value category. The sector is expected to see an additional £10–20 million in annual costs. Transitional relief of £2.3 billion will be available across all sectors for the first three years.
Cold storage facilities are not included in the permanent reduced multipliers given to retail, hospitality, and leisure sectors, and most sites exceed the threshold for Small Business Rates Relief.
Fuel duty
The temporary 5p per litre cut will remain until August 2026, after which duty will rise in stages: 1p in September 2026, 2p in December 2026, and 2p in March 2027. Fuel duty will return to pre-2022 levels by spring 2027. Cold chain operators reliant on diesel-powered HGVs and transport refrigeration units (TRUs) are expected to face higher costs. A full 5p increase would add an estimated £135.7 million annually to sector fuel costs.
Employer costs and National Living Wage
Employer National Insurance remains at 15%, and the lower earnings threshold stays fixed at £5,000 until 2031. From April 2029, only the first £2,000 of pension salary-sacrifice contributions will be exempt from NI. The National Living Wage will increase to £12.62 per hour in April 2026. Wage-bill rises will be compounded by frozen NIC thresholds.
Capital investment
Full expensing remains in place for asset purchases, but leased assets will not qualify. Instead, from January 2026, a 40% First-Year Allowance applies, with the remainder written down at standard rates. This provides accelerated relief for leased refrigeration, automation, software, and alternative-fuel equipment, but falls short of full expensing for large-scale projects.
Other policy changes
The Soft Drinks Industry Levy will expand in January 2028 to include sweetened milk-based drinks, which may affect cold-chain handling and pricing.
Industry feedback
A post-Budget survey found the National Living Wage increase was the biggest concern, followed by tax changes, business rates rises, and fuel costs. Industry groups plan to continue monitoring policy implementation ahead of the 2026–27 changes.
© Cold Chain FederationFor more information:
Maddy Coupe
Cold Chain Federation
Tel: +44 (0) 118 988 4468
Email: [email protected]
www.coldchainfederation.org.uk
