IN Brief:
- Exotec argues that targeted UK tax support could reduce the upfront barrier to warehouse automation investment.
- Italy's cited Transizione 4.0 rate provided a 20% credit on the first €2.5 million of qualifying 2025 investment.
- Official Italian rules show the scheme now covers completion of previously committed projects rather than new August 2026 orders.
Exotec is calling for more targeted UK incentives for warehouse automation, arguing that the upfront cost of robotics and automated storage can prevent operators investing even where labour, space, and productivity pressures support the business case.
The warehouse automation supplier has pointed to Italy’s Transizione 4.0 programme as an example of government support reducing the initial capital burden around advanced machinery. Under the relevant 2025 rules, qualifying material investment attracted a 20% tax credit on the first €2.5 million of expenditure, 10% on the next tranche up to €10 million, and 5% between €10 million and €20 million.
There is an important timing qualification. That Italian measure is not open in August 2026 to a warehouse operator deciding to place a new automation order now.
Official Italian rules allowed qualifying 2025 investments to be completed as late as 30 June 2026 only where the supplier had accepted the order and the customer had paid an advance of at least 20% by 31 December 2025. Current administrative activity concerns completion notifications and previously committed projects rather than a new 2026 investment window.
The distinction does not invalidate Exotec’s broader policy argument, but it changes the comparison. Italy provides an example of how automation investment has been incentivised, not a currently available scheme against which a British operator can compare an August 2026 purchase.
Asaf Curelaru, Operations Director for UK & Ireland at Exotec, argues that European warehouse automation is increasingly being driven by labour availability, operating cost, storage density, and unit economics rather than simply a desire to increase speed.
Those pressures create a difficult investment profile. Automated storage and retrieval systems, mobile robots, conveyors, sortation equipment, controls, and software can require substantial capital before the first order moves through the finished system.
The financial return then accumulates over several years through labour productivity, higher throughput, denser storage, reduced walking, improved accuracy, and the ability to avoid or postpone taking additional warehouse space.
High upfront cost can therefore block a project even where its long-term operating economics are credible. An incentive that brings forward tax relief or reduces the effective purchase cost can change the investment threshold without altering the physical performance of the technology itself.
The UK already provides broader investment support. Companies can use full expensing against qualifying new and unused plant and machinery, allowing the cost to be deducted from taxable profits in the year of investment rather than being relieved gradually over a longer period.
Made Smarter also supports industrial digital adoption, including advice, digital roadmaps, skills work, and grant funding for eligible small and medium-sized manufacturers. Those programmes can include automation and robotics, but their manufacturing focus means they are not equivalent to a warehouse-specific incentive available across the wider logistics sector.
That leaves the policy gap Exotec is targeting. A large distribution centre can employ hundreds of people and depend on sophisticated machinery, controls, software, and energy infrastructure, yet its automation investment may sit outside programmes designed explicitly around manufacturing productivity.
Designing a specialist incentive would not be straightforward. A broad tax credit available to every warehouse robotics purchase risks subsidising investments that operators would have made anyway, reducing the amount of additional productivity purchased with public money.
A narrowly defined list of eligible technologies creates another problem. Warehouse automation evolves quickly, and rules based around a particular class of robot or storage system can become obsolete before the tax regime itself is reviewed.
Outcome-based support sounds more attractive but is harder to administer. Throughput, labour productivity, storage density, accuracy, and energy efficiency can all be measured, yet each also depends on product mix, demand, building layout, staffing, software, and management practices alongside the equipment receiving the incentive.
Automation can also shift bottlenecks rather than remove them. Increasing picking capacity can expose inadequate packing, despatch, yard, charging, or transport capability, while a highly automated warehouse becomes more dependent on maintenance skills, controls, software, data quality, and reliable electrical infrastructure.
The workforce effect is similarly more complex than substituting machines for people. Automated operations still need technicians, systems specialists, supervisors, engineers, and employees able to manage exceptions when automated processes encounter something outside their normal operating rules.
Exotec’s policy argument nevertheless arrives as logistics operators face continued pressure to produce more from existing buildings. High property costs and limited labour pools strengthen the case for denser storage and goods-to-person automation where the customer and order profile can support it.
Italy’s previous 20% credit provides one example of how government can change the capital calculation, but it should not be represented as a benefit newly available today. Any UK policy would need its own rules on eligibility, additionality, funding, skills, and productivity if it were intended to support projects that otherwise would not happen.
The policy question is therefore narrower than whether warehouse robots deserve a subsidy. It is whether targeted support can bring forward productive investment that the existing tax regime does not already make commercially viable, without simply reducing the cost of automation projects that were going ahead anyway.
