Mike Ashley's Frasers Group joins calls for business rates reformby Angharad Carrick
Mike Ashley’s Frasers Group has said that with the British high street on “life support” the Treasury must take action on business rates reform.
The retail tycoon has said that the current system is a “significant contributor to the dire straits the high street currently finds itself in.”
Fraser Groups’ statement comes amidst a campaign led by the British Retail Consortium calling on the government to reform the transitional relief system.
Read more: Retail bosses call for business rates reform in 2020 budget
In a letter to the Chancellor, the BRC and 52 major UK retailers have asked the Treasury to outline its plans to reform the system ahead of the budget.
In a statement today, the company said: “Transitional relief in particular is disastrous for a great many retailers and needs to be significantly modified to at least ensure the correct amount of rates are paid by the end of transitional relief periods.”
Transitional relief limits the speed at which a firm’s business rates’ liability changes when the property is reevaluated every five years.
Businesses that pay more benefit from “upwards transitional relief”, which subsidises the process and means rates will rise more slowly.
The firms whose rates bill suffer from “downwards phasing”, which prevents them from moving to their lower rate immediately, forces them to overpay in order to subsidise upwards transition.
The BRC has called on the government to abolish “downwards phasing”, which would require central government funding for upwards transition.
Mike Ashley said: “The current system whereby downward transitions of just a few per cent a year means that the correct amount is never reached or even close to, punishes those in greatest need of relief.”
Read more: Experts slam business rates appeals system
Frasers has claimed that some of its stores are paying up to four times the rates bills they should be which “is no doubt repeated widely across UK retail.”
The British high street has had a difficult start to the year, with the collapse of department store Beales and the closure of all 79 Mothercare stores.
The dismal period for the high street has been described by the Centre for Retail Research as a “crisis”.