Dragons’ Den icon Theo Paphitis has warned of mass closures if shops are hit even harder at the next Budget.
The businessman, who owns the stationery chain Ryman, issued a stark warning that the UK high street may not survive further tax hikes.
Companies are already being hit with hefty business rates – with speculation growing Chancellor Rachel Reeves may pile on the pain in the autumn.
Mr Paphitis highlighted the immense burden smaller businesses are carrying compared to online giants who are paying ‘next to nothing’.
Firms have also been battered by hikes in National Insurance contributions and an inflation-busting increase in the minimum wage which came into effect in April.
Writing in The Sun, Mr Paphitis said: ‘After everything the high street has been through, asking it to carry even more weight would be the final straw for many.
‘The government must ensure that no shop pays more in the upcoming Autumn Budget.’
He added: ‘Once a shop shuts, it is far harder and costlier to bring it back, meaning each closure represents a long-term wound to the health of the high street.’
Dragons Den icon Theo Paphitis has warned of mass closures if shops are hit even harder at the next Budget
Rows of boarded-up shops line the high street in Waterlooville, Hampshire
Chancellor Rachel Reeves during a visit to Studio Ulster in Belfast on August 12
Mr Paphitis has previously criticised the business rates system, which he says the government has failed to properly reform.
He argued that it unfairly hits bricks and mortar businesses, while online and technology giants only face the tax on their warehouses.
Mr Paphitis’s comments come as store closures this year are predicted to top 17,000 this year.
It is the highest figure since the Centre for Retail Research (CRR), which compiled the report, began collecting the data in 2015 and follows the closure of 13,479 stores last year.
The vast majority of closed shops in 2024 – 11,341 – were independent retailers, a 45.5 per cent jump against the previous year.
Business leaders have called for the Chancellor to ‘urgently’ change course with her tax-raising policies to prevent British high streets from becoming ghost towns.
The CRR’s forecast of 17,350 store closures would make 2025 worse than 2022, when the withdrawal of government support measures following the pandemic caused 17,151 shops to close.
Around 16,145 stores shut their doors at the height of lockdown in 2020.
Store closure figures were compiled by industry experts at the Centre for Retail Research
Boarded-up shops in Reading. Experts have predicted that 17,350 shops will shut down in 2025
Professor Joshua Bamfield, director of the CRR previously said: ‘Whilst the results for 2024 show that although the outcomes for store closures overall were not as poor as in either 2020 or 2022, they are still disconcerting, with worse to come in 2025.’
Of the predicted 2025 figure, the vast majority of store closures, 14,660, are expected to be independent retailers.
These firms usually operate on very tight profit margins and may not have enough cash to cover the cost of the Treasury’s tax raid and minimum wage hikes.
‘This is a tragic scenario that we warned the government could come to pass if they did not change course,’ said Andrew Goodacre, head of the British Independent Retailers Association.
He added: ‘Overall costs for independent retailers are going up and the planned increases in National Insurance, minimum wage and business rates will leave many with no choice but to shut up shop.’
Ms Reeves declared in October that employers would pay a 15 per cent National Insurance rate on staff salaries exceeding £5,000 from April rather than the current 13.8 per cent levy on wages above £9,100.
She also said the National Living Wage would go up by 77p to £12.21 per hour, alongside increases in the capital gains tax rates on selling business assets.
Pedestrians pass boarded-up shops in Hastings, East Sussex, in March last year
Retailers have been among those leading the charge against the Chancellor’s punishing tax measures.
In November, more than 80 bosses signed an open letter to Reeves warning that her Budget plans would force them to hike prices, cut jobs and close stores.
Signatories included the heads of high street giants Marks & Spencer, Next and John Lewis as well as the major supermarkets such as Tesco, Sainsbury’s, Morrisons and Asda.
Meanwhile, firms have called for ministers to reform the business rates system to make physical shops more competitive with their online counterparts.
