Shops may face widespread closures, according to Dragon's Den investor Theo Paphitis, due to further financial strain at the upcoming Budget.
In a recent article for The Sun, business magnate Theo Paphitis has raised concerns about the future of the high street, particularly in light of the upcoming Autumn Budget. Paphitis, a familiar face on DRAGONS' Den, has issued a warning about potential mass closures of shops if they face further tax hikes.
Paphitis highlights the immense burden that high street shops are currently carrying, compared to online giants who pay "next to nothing" in taxes. However, he did not specify which online giants he was referring to.
The retail magnate believes the high street would not survive further tax hikes, as it has already been hit hard by hefty business rates. He criticizes the current business rates system for retail, which requires them to pay 20% of all receipts.
The loss of shops is not just an economic issue. It also impacts the social fabric, reducing spaces where people meet, work, and spend time. Over 17,000 shops are predicted to close this year, each closure representing a long-term wound to the health of the high street.
The Chancellor, Rachel Reeves, is expected to propose tax hikes in the Autumn Budget. However, the article does not mention any potential relief measures for the high street. Speculation suggests that Chancellor Reeves will add to the pain for shops.
Paphitis points to recent rises in employer National Insurance contributions (from 13.8% to 15%), a significant increase in the National Living Wage, and raised Capital Gains Tax as factors that have already tightened business margins. Further fiscal tightening, he argues, would risk pushing many shops to collapse, as many sectors including retail have already accounted for a large portion of recent company insolvencies.
In his article, Paphitis states that asking the high street to carry even more weight would be the final straw for many shops. He urges the government to ensure that no shop pays more in the Autumn Budget.
The article does not provide any information on the impact of the closures on the overall economy or any potential consequences for supermarket giants increasing prices across their stores. It also does not specify which tax hikes are being referred to.
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