Sports Direct billionaire Mike Ashley urged the Treasury to take action on business rates today, saying steep payments have helped put the British high street on “life support”.
The retail tycoon has said that the current system is a “significant contributor to the dire straits the high street currently finds itself in.”
Formerly called Sports Direct, Fraser Group’s statement comes amidst a campaign led by the British Retail Consortium calling on the government to reform the transitional relief system.
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 11 March Budget.
In a statement today, Ashley’s business 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.
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.”
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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”.