The bustling streets where Brits have shopped for decades are facing an unprecedented squeeze.
Dragons’ Den star Theo Paphitis has issued a stark warning that if the government ramps up taxes in the next Budget, many high street shops could be forced to close for good.
His concerns highlight a growing crisis for independent retailers struggling to survive against a backdrop of escalating costs.
Theo Paphitis Sounds the Alarm on Business Struggles
Paphitis, who owns the stationery chain Ryman, has long been a vocal advocate for brick-and-mortar stores.
Writing in The Sun, he said the UK high street has already been battered by a series of financial blows, from soaring business rates to National Insurance hikes and a significant rise in the minimum wage this April.
“After everything the high street has been through, asking it to carry even more weight would be the final straw for many,” he wrote.
He urged the government to ensure that no shop faces higher costs in the upcoming Autumn Budget, emphasizing that each closure leaves a lasting wound on the health of the high street.
Independent Shops Bear the Heaviest Burden
According to Paphitis, physical retailers are paying the price while online giants get off lightly.
Business rates, he says, disproportionately affect high street stores, whereas online companies mainly face taxes on their warehouses.
This uneven system, combined with rising staff costs and other overheads, leaves smaller businesses particularly vulnerable.
Store Closures Hit Record Levels
Data from the Centre for Retail Research (CRR) paints a grim picture.
This year, the UK is on track to lose around 17,350 shops—the highest number since the CRR started tracking closures in 2015.
To put that in context, 13,479 stores shut last year, and independent retailers bore the brunt, with 11,341 closures in 2024 alone—a 45.5% increase from 2023.
Professor Joshua Bamfield, CRR director, warned that although last year’s closures weren’t as severe as during the pandemic or the 2022 post-pandemic withdrawal of support, the trends for 2025 look even bleaker.
The majority of expected closures—14,660—will be independent stores operating on extremely tight margins.
Business Leaders Urge Policy Changes
Andrew Goodacre, head of the British Independent Retailers Association, called the situation tragic.
He stressed that rising National Insurance contributions, minimum wage hikes, and business rates are pushing independent retailers toward a point of no return.
In practical terms, employers now face a 15% National Insurance rate on salaries above £5,000, up from 13.8% on wages above £9,100.
Meanwhile, the National Living Wage has risen to £12.21 per hour, along with increased capital gains tax on business asset sales.
Retailers argue these changes make survival almost impossible.
In November, more than 80 high-profile business leaders—including bosses from Marks & Spencer, Next, John Lewis, Tesco, Sainsbury’s, Morrisons, and Asda—warned the Chancellor that her tax measures could force them to raise prices, cut jobs, or shutter stores entirely.
Calls for Reform Grow Louder
Amid these warnings, companies continue to press the government to overhaul the business rates system.
Reform advocates argue that without leveling the playing field between physical shops and online competitors, British high streets could become hollowed-out shells, leaving communities without essential services and local jobs.
The picture is clear: without urgent intervention, the UK’s high streets—once the lifeblood of local economies—could face an irreversible decline.
Independent retailers, in particular, are sounding the alarm, highlighting that policy decisions made this autumn could determine whether beloved local shops survive or vanish for good.
