Mike Ashley's Frasers calls for business rate reform
By Sean Farrell
Date: Friday 14 Feb 2020
(Sharecast News) - Frasers Group, the owner of Sports Direct, has called on the government to take urgent action to reduce the burden of business rates on retailers by overhauling transitional relief.
The company, headed by billionaire founder Mike Ashley, joined more than 50 leading retailers in requesting changes to transitional relief, a component of business rates.
Transitional relief limits the speed of changes to business rates linked to a property's rateable value. By slowing changes for underpayers and overpayers, the measure forces retailers to subsidise other sectors and places outside London to subsidise businesses in London, the British Retail Consortium said.
Frasers said: "With the UK high street on life support, the time for reform has long since passed. 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.
"The current system, whereby downward transitions of just a few percent a year means that the correct amount is never reached or even close to, punishes those in greatest need of relief."
Ashley has made repeated calls for reform of business rates. Frasers said some of its stores' business rates bills were up to four times higher than they should be. Like other retailers, Frasers said business rates were one of the main reasons for the dire state of Britain's high streets.
The government has promised a fundamental review of business rates and is due to produce its first budget in the next few weeks under new Chancellor Rishi Sunak. Boris Johnson's government has an influx of new MPs from towns in the Midlands and northern England where high streets are suffering.
The BRC said retailers have subsidised other sectors by ?543m over the past three years because of transitional relief and that the subsidy to London by other regions was ?596m.
Helen Dickinson, chief executive of the BRC, said: "The future of retail is an issue that matters to people everywhere - it employs 3m people and serves the needs of the entire country. Yet transitional relief undermines both the industry as a whole, and many regions that it serves. Northern high streets effectively subsidise London banks."
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