Ashley warns of store closures after ‘worthless’ rates holiday
MIKE Ashley’s Frasers Group has said the Chancellor’s business rates holiday is ‘near worthless’ for larger firms and makes it close to impossible for it to take on old Debenhams shops.
The Sports Direct and House of Fraser owner ( pictured) said the £2m cap on the amount of relief a company can claim means it will have to review all its stores to find any that might no longer be viable.
In his Budget on Wednesday, Rishi Sunak extended the holiday on business rates, a tax which all shops and pubs must pay, until the end of June. An original relief package was due to run out at the end of this month.
The Chancellor said that for the rest of the financial year after June rates would remain discounted by two-thirds, up to a value of £2m if businesses are closed. This cap shuts out many larger businesses, including Ashley’s Frasers Group, and disappointed those hoping for a wider overhaul to the tax. It added: ‘For Frasers Group this cap will make it nearly impossible to take on ex-Debenhams sites. It will also mean we need to review our entire portfolio to ascertain stores that are unviable due to unrealistic business rates. Frasers Group believes that retailers should pay the fair amount of rates in line with realistic rateable values, but instead we continue to have an unwieldy, overly complex and out- of- date business rates regime.’ A judge issued a winding up order against Debenhams in January, and the company’s administrators have been selling off parts of the business. Online retailer Boohoo bought the brand name and its website for £55m later that month.
However, it did not want Debenhams’ 118 shops. Ashley is reportedly trying to take over some of those stores, a move which could create jobs. Frasers has led calls for a complete overhaul of the current business rates system in recent years.
The Government’s next business rates revaluation will take place in 2023, with rates next year set to be based on figures from the latest valuation in 2015.