Theo Paphitis, 53, former star of the BBC’s Dragons’ Den programme, is given to blowing his own trumpet. But the owner of the Boux Avenue lingerie chain has come up with an idea that needs trumpeting — one to save the High Street and screw Amazon for more tax.
Paphitis wants to scrap business rates and impose a 2% sales tax on shopkeepers and tax-avoiding online retailers. The aim is to balance a reduction in tax on small retailers with an increase from online distributors.
The Millwall ex-chairman, who also owns the Ryman and Robert Dyas chains, says deploying one big idea rather than fiddling with the range of initiatives proposed by retail expert Mary Portas and ex-Wickes boss Bill Grimsey is needed. “You wouldn’t have to bitch about Amazon any more,” he adds.
Grimsey has just produced a report proposing a £550 million levy on retailers to pay for upgrading High Streets. “A load of old bollocks,” says Paphitis.
Unfair, given Grimsey’s calls for an overhaul of business rates. The Mary Portas review, which has led to the government setting up 27 Portas Pilot towns? At least she has raised the topic into the public consciousness.
But the price paid by the Queen of Shops has been high. Last week she was burned at the political stake after failing to disclose a £500,000 TV contract linked to her report.
“Whoever saw her on telly and gave her the job must have thought it was real,” said Paphitis in his speech to the British Council of Shopping Centres conference at Olympia. “You take someone who nobody has ever heard of and put them on TV...”
Indeed, Theo. But Paphitis is now off the TV and back to being a real-life retailer with 250 shops and three decades of experience. He says business rates, which will collect £7 billion this year, are “no longer fit for purpose.”
In July, Topshop owner Sir Philip Green called for the tax to be overhauled to create “a level playing field” with online retailers. Tough, given the legalities of charging a sales tax on transactions technically fulfilled abroad.
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So how can it be done? “That’s up to the Treasury,” Paphitis says. They’ve got plenty of smart folk. Let them work it out. What we have here is a ticking time bomb. We have to address the issue sharpish.”
