With the UK economy still trying to find its footing, the fate of many local shops hangs in the balance.
Business heavyweight and Dragons’ Den star Theo Paphitis has come forward with a stark warning: if the upcoming Autumn Budget imposes heavier taxes on retailers, the UK’s high streets could face a wave of mass closures.
Small Shops Carry the Heaviest Burden
Theo Paphitis, who owns the stationery chain Ryman, highlights a major imbalance in how taxes hit businesses.
Smaller shops are struggling under steep business rates and rising costs like increased National Insurance and a higher minimum wage.
Meanwhile, online giants pay comparatively little, often only taxed on their warehouses, leaving bricks-and-mortar stores to shoulder a disproportionate share of the burden.
In a recent article for The Sun, Paphitis explained, “After everything the high street has been through, asking it to carry even more weight would be the final straw for many.”
He stressed the importance of the government ensuring no shop faces further tax hikes in the upcoming budget, warning that each closure damages the high street in a way that’s difficult and expensive to reverse.
Alarming Rise in Store Closures
The figures back up Paphitis’s concerns. This year, store closures are expected to surpass 17,000—the highest number since data collection began in 2015.
That’s a sharp increase following 13,479 closures in 2024.
Most of these shuttered shops were independent retailers, which saw a nearly 46% jump in closures compared to last year.
Business leaders and industry groups are urgently calling on Chancellor Rachel Reeves to rethink her tax policies, fearing that without intervention, many high streets will turn into ghost towns.
Professor Joshua Bamfield, director of the Centre for Retail Research (CRR), points out that while 2024’s closures were bad, 2025 could be even worse, with an estimated 17,350 shops shutting down.
The Impact on Independent Retailers
Independent retailers are particularly vulnerable. With tight profit margins and limited cash reserves, many simply cannot absorb the planned tax hikes, wage increases, and rising business rates.
Andrew Goodacre, head of the British Independent Retailers Association, described the situation as “tragic,” urging the government to act to prevent further damage.
What Are the Specific Tax Changes?
Chancellor Rachel Reeves announced key changes last October that have retailers worried.
Starting in April, employers will face a 15% National Insurance rate on salaries over £5,000—up from the current 13.8% on wages above £9,100.
The National Living Wage is also increasing by 77p to £12.21 per hour, and capital gains tax rates on business asset sales are rising.
Retail Giants Speak Out
The retail sector is united in its pushback against these policies.
Over 80 top executives from major UK retailers, including Marks & Spencer, Next, John Lewis, Tesco, Sainsbury’s, Morrisons, and Asda, signed an open letter last November to Chancellor Reeves.
They warned that her tax plans would force them to raise prices, reduce staff, and close stores.
Calls for Business Rates Reform
Beyond immediate tax concerns, many retailers want the government to reform the business rates system altogether.
They argue that the current setup unfairly penalizes physical stores compared to online competitors, making it harder for traditional shops to compete and survive.
If the government doesn’t change course soon, the future of the UK’s high streets looks increasingly uncertain.
Many hope the Autumn Budget will bring relief rather than more pressure — because once a shop closes, getting it back isn’t just tough, it’s costly, and the damage is long-lasting.
With the UK economy still trying to find its footing, the fate of many local shops hangs in the balance.
Business heavyweight and Dragons’ Den star Theo Paphitis has come forward with a stark warning: if the upcoming Autumn Budget imposes heavier taxes on retailers, the UK’s high streets could face a wave of mass closures.
Small Shops Carry the Heaviest Burden
Theo Paphitis, who owns the stationery chain Ryman, highlights a major imbalance in how taxes hit businesses.
Smaller shops are struggling under steep business rates and rising costs like increased National Insurance and a higher minimum wage.
Meanwhile, online giants pay comparatively little, often only taxed on their warehouses, leaving bricks-and-mortar stores to shoulder a disproportionate share of the burden.
In a recent article for The Sun, Paphitis explained, “After everything the high street has been through, asking it to carry even more weight would be the final straw for many.”
He stressed the importance of the government ensuring no shop faces further tax hikes in the upcoming budget, warning that each closure damages the high street in a way that’s difficult and expensive to reverse.
Alarming Rise in Store Closures
The figures back up Paphitis’s concerns. This year, store closures are expected to surpass 17,000—the highest number since data collection began in 2015. That’s a sharp increase following 13,479 closures in 2024.
Most of these shuttered shops were independent retailers, which saw a nearly 46% jump in closures compared to last year.
Business leaders and industry groups are urgently calling on Chancellor Rachel Reeves to rethink her tax policies, fearing that without intervention, many high streets will turn into ghost towns.
Professor Joshua Bamfield, director of the Centre for Retail Research (CRR), points out that while 2024’s closures were bad, 2025 could be even worse, with an estimated 17,350 shops shutting down.
The Impact on Independent Retailers
Independent retailers are particularly vulnerable. With tight profit margins and limited cash reserves, many simply cannot absorb the planned tax hikes, wage increases, and rising business rates.
Andrew Goodacre, head of the British Independent Retailers Association, described the situation as “tragic,” urging the government to act to prevent further damage.
What Are the Specific Tax Changes?
Chancellor Rachel Reeves announced key changes last October that have retailers worried.
Starting in April, employers will face a 15% National Insurance rate on salaries over £5,000—up from the current 13.8% on wages above £9,100.
The National Living Wage is also increasing by 77p to £12.21 per hour, and capital gains tax rates on business asset sales are rising.
Retail Giants Speak Out
The retail sector is united in its pushback against these policies.
Over 80 top executives from major UK retailers, including Marks & Spencer, Next, John Lewis, Tesco, Sainsbury’s, Morrisons, and Asda, signed an open letter last November to Chancellor Reeves.
They warned that her tax plans would force them to raise prices, reduce staff, and close stores.
Calls for Business Rates Reform
Beyond immediate tax concerns, many retailers want the government to reform the business rates system altogether.
They argue that the current setup unfairly penalizes physical stores compared to online competitors, making it harder for traditional shops to compete and survive.
If the government doesn’t change course soon, the future of the UK’s high streets looks increasingly uncertain.
Many hope the Autumn Budget will bring relief rather than more pressure — because once a shop closes, getting it back isn’t just tough, it’s costly, and the damage is long-lasting.