Retail entrepreneur and former ‘Dragon’ Theo Paphitis was among the keynote speakers at this week’s Spring Fair, where his impassioned plea to the UK government was to close loopholes – and quickly – that allow large offshore businesses, such as Chinese online marketplace Temu, to avoid paying import duties and other taxes.
“Temu are operating legally but exploiting international rules that allow them to cross borders without regulation, shipping products directly from China to here. They don’t pay VAT or import duties. They are not paying corporation tax. They are not employing people in the UK. They are not paying National Insurance, all of which means that they have an unfair advantage,” he stated. “It’s not a level playing field, and the only outcome is that they will destroy our UK market leading to the demise of our own high streets.”
He continued: “Importantly, a recent investigation by the British Toy & Hobby Association (BTHA) revealed that some toys do not meet regulation standards and are a risk to the health and safety of children. There’s no regulation and no Environmental, Social and Governance (ESG). We don’t know where things are produced, or how they are produced. The British government is currently looking at Temu, but they must legislate quickly because we need to get things on a level playing field fast. The company must pay their fair share.
Interviewed on the Inspiring Retail Stage by Lauretta Roberts, co-founder, ceo and editor in chief of The Industry, Theo emphasised how tough the climate is for retailers. “The government needs to put confidence back in the economy and in business, so that we can get those green shoots,” he told a packed audience. “However, you can’t start from zero and get growth, but we need medium initiatives now.”
Asked by Lauretta what retailers could do to create confidence, he said: “There’s no point in doing the same thing over and over again. We have to take a few minutes out to start thinking how can we do things differently. Businesses need to think about what they are doing and if there’s a different way to do it. They need to ask themselves what are my USPs? What is my reason for existing in this market? How can I do things better? I have always looked at what other people are doing and thought that I could do it better. You have to ask yourself, where is my place in this? How can I execute it better?”
He added that persistence and confidence are key attributes for business owners. “I have always been a supporter of small businesses because that’s where I started out, with one desk, one phone, one line, one assistant. It was a daily hustle. So the one thing you must have as a small business, or any sized business, is confidence in your USP, your reason to exist on the high street. We have heritage brands such as Rymans and Robert Dyas and have to have the right proposition for the consumer to cross our threshold and to come into our stores, and we are using technology to do that. Once they have come into the store, we can show them what else we have got.”
As for business rates, he said they make doing physical retail “horrendously expensive”, while pointing out that they represent a big chunk of the government’s revenue. “They need to replace them with something else,” he stated. “And while legitimate online businesses do a great job, they don’t pay tax, yet need to pay their fair share like everyone else. There aren’t the same pressures on the online companies, so we have to level the playing field, and the government must legislate. If not, it will kill the high street.”
Top: Retail entrepreneur and former ‘Dragon’ Theo Paphitis is shown in conversation with Lauretta Roberts at Spring Fair earlier this week.
