Chris Tattersall, managing director of Woolroom, a British natural sleep products company specialising in wool bedding, has voiced concerns over the challenges faced by entrepreneurs amid rising costs and increasing tax pressures in the UK. Founded in 2008 with roots in a family textile business spanning 150 years, Woolroom now employs 36 people globally but recently shuttered its Marlow, Buckinghamshire store due to unsustainable overhead expenses.
Tattersall highlighted that the business experienced a 25% decline in profits this year, compelling him to reduce his own draw from the company. He cited recent increases in the national minimum wage alongside higher employers’ National Insurance contributions as significant factors squeezing profitability.
The economic climate, he said, has forced Woolroom and other companies to reconsider their operational strategies, including staffing decisions and the potential of relocating jobs internationally. Currently employing two staff members in South Africa, Tattersall is exploring expanding that presence, pointing to the country’s similar time zone, lower labour costs, relatively strong educational standards, and widespread use of English. While he prefers keeping teams co-located for agility and flexibility, escalating UK costs may necessitate a broader shift.
Tattersall warned that the cumulative effect of employment costs, productivity demands, and potential tax increases are undermining incentives for entrepreneurs to invest in and grow UK-based businesses. He expressed concerns about the impact of proposed capital gains tax changes due in the forthcoming Budget on October 28, saying higher penalties on business sales could dampen motivation to expand enterprises.
Research conducted by the professional services firm S&W found that 54% of surveyed business owners would consider relocating their operations abroad if additional tax hikes are introduced. More than half also indicated they might leave the UK if a wealth tax were implemented. Toby Tallon, tax partner at S&W, cautioned that further tax increases could erode business confidence, reduce investment, and push entrepreneurs to look overseas.
Echoing these sentiments, Tattersall argued that new taxes could dissuade talented entrepreneurs from basing themselves in the UK, negatively affecting domestic investment and economic growth. He emphasised that Woolroom’s foundation would have been unlikely under current tax and employment frameworks.
Despite these challenges, Tattersall remains optimistic about Woolroom’s future prospects, citing strong growth potential in existing markets and opportunities to expand into regions such as the European Union and Canada over the next two years.
“The business is poised to capitalise on the unique benefits of wool bedding and reach more consumers globally,” he said. “Provided the economic environment supports growth, we believe there are significant opportunities ahead.”