A major discount retailer is set to close multiple stores across the country after falling into liquidation in another blow to Britain’s high street.
MaxiDeals, a bargain chain that is considered a competitor Poundstretcher, appears to have ceased trading “very suddenly” ahead of Chancellor Rachel Reeves’s looming tax raid on businesses.
Speaking to The Grocer, the retailer’s managing director Paul Mathers cited a “really tough trading environment on the high street, accompanied with rising costest”.
He wrote in a statement online: “MaxiDeals was a new startup discount retail business backed by investors, where I was given the responsibility of opening its retail locations across various parts of the UK.”
“We opened these stores during very challenging times with the Covid outbreak just starting, however we did manage to get to 24 stores.”
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Another high street retailer is shutting down stores ahead of Reeves’s tax raid
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Figures from Companies House reveal that MaxiDeals went into voluntary liquidation on February 18.
The business was launched during the Covid-19 pandemic and gained prominence for its discounted products, from food to cleaning.
Originally named MaxiSaver, the retailer’s first store was opened in Hinckley, Leicestershire, in August 2020.
Since then, the business has opened 24 stores across the UK under its parent company J&E Group.
Many businesses have cited the impact of fiscal changes announced by Rachel Reeves during her fiscal statement last October, which are due to come into effect later this year.
Notably, the Chancellor confirmed a hike to the National Living Wage and the rate paid towards National Insurance contributions by employers.
Research suggests the hike in the employer National Insurance contribution rate to 15 per cent will cost UK retailers an extra £28billion annually at least.
Data from Novuna found the basic rate band, making up over three-quarters of the UK workforce, will rise by 12 per cent. This equates to £566 per employee, costing businesses an additional £16.7 billion alone.
For the two million workers making the National Living Wage or Minimum Wage, businesses will see contributions jump by £1,044 per employee. This is a 45 per cent rise and comes to a £2.1billion cost nationwide.
Employers of the UK’s 6.31 million higher rate taxpayers will have to deal with the second largest increase per worker, with contributions rising by £1,110, costing businesses in total £7billion.
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Theresa Lindsay, the director at Novuna, said: “The £28billion NationalInsurance tax bill represents a significant financial burden for UK businesses across all industries and will inevitably force many businesses to radically rethink their hiring and pricing strategies in order to remain sustainable for the long term.
“We’re already seeing the fallout across the sectors we operate in, as businesses grapple with impending cost pressures and explore competitive funding options to maintain liquidity and help them navigate the challenges.
“The added concern is the wider knock-on effect across the economy, if businesses scale back or worse still, stop trading as a result of this tax hike, we could see significant disruption across supply chains which would stall growth in the UK economy.”
The changes to National Insurance will come into effect from April 2025.
