Theo Paphitis, retail entrepreneur and star of TV’s Dragons’ Den, has called for the abolition of business rates to future-proof the UK high street.

Speaking on the Go Radio Business Show with Hunter & Haughey, Mr Paphitis said: “The high street is varied and has lots of moving parts so predicting its future is not just a binary black and white answer.

“We can talk about this for absolutely forever but there’s one key thing the government needs to do really sharpish as a catalyst to all the other things happening and that is the removal of the most archaic ridiculous tax in the world: the business rates, which is absolutely killing physical retail.”

Sir Tom Hunter agreed with this prognosis, adding: “Theo and I have discussed this. Thankfully, I don’t have any shops on the high street anymore; I was very lucky. But this is a case where business has moved on and the legislation is in the Victorian Ages. So let’s get it sorted!”

Mr Paphitis was keen to point out the concept came into place long before.

“Legislation was drafted in the 1500s. It was getting the wealthy, the shopkeepers, to give free food and free things to the really poor people. Of course, we still have it. And ‘ye olde internet’ surprisingly did not exist in the 1500s and now accounts for nearly half of all trade.

“So on that basis you can’t have half of the trade not being taxed and the other half having tax piled on to them, as they reach the law of diminishing returns.

“This silly tax needs to be reformed. Someone’s got to pull their finger out.”

Mr Paphitis conceded that, in his recent budget, Chancellor Rishi Sunak gave a further three months holiday for business rates then two thirds for the rest the year.

“He gets it, he understands. Now the big question is: ‘Have they the intellect and the ability and the will, more importantly, to do something about it permanently?’.

“This is something previous chancellors and governments have not because they don’t see where they’re going to get the benefit for it – for all the work they’re going to have to put in – because they’ll unlikely be in office. So they do other things like decorate their flats and all sorts of things!”

Lord Willie Haughey pointed out it was not only retail being hit by business rates but hotels too.

“When they sent me the new demand for the tax about two years ago, I actually had to think long and hard about closing my hotel down. It was actually borderline with the increase and the valuation. But when I sat down and I discussed this with my sister-in-law who runs the hotel we just couldn’t see 47 people lose their jobs.

“They have to look at this and taxes should be based on profits not on the values of properties.”

Mr Paphitis agreed, adding: “I could live with a turnover tax if it was sensible and someone really did the work. The easiest thing, of course, is to tax people on the profits they make but, more importantly, make sure people show their profits.

“The reason I mention turnover and sales tags is purely because some organisations are not doing big business in the UK, taking those big swathes of the UK retail economy and contributing little to nothing in taxation because they’re registered outside of this country.

“That has to stop and someone’s got to do something about it.”