Mike Ashley’s Frasers Group has branded the chancellor’s new business rates holiday “near worthless” for larger firms and is an obstacle to it taking on old Debenhams shops.

The Sports Direct and House of Fraser owner said the £2m limit on the amount of relief a company can claim means it will have to review all its stores to find any that may no longer be viable, due to the “unrealistic” levy.

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.

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The original assistance package was due to run out at the end of March.

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.

But the cap shuts out many larger businesses, including Mr Ashley’s Frasers Group, and has disappointed those hoping for a shake-up of the system.

The company said in a statement: “Frasers Group wishes to note its disappointment at the business rates relief announced.

“Whilst the retail industry as a whole has repeatedly asked for structural reform of business rates, none has been forthcoming.

“Frasers Group and many retailers would have expected suitable relief until structural reform is implemented.”

It added: “For Frasers Group this cap will make it nearly impossible to take on ex-Debenhams sites with the inherent jobs created.

“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of rates in line with realistic rateable values, but instead we continue to have an unwieldy, overly complex, and out of date business rates regime.”

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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.

Mr Ashley is reportedly trying to take over some of those stores in a move which could create jobs.

Frasers, which also owns the Flannels and Evans Cycles brands, has led calls for reform of business rates in recent years.

The Treasury is currently undertaking a root-and-branch review of the system, but last month pushed back the publication of its final report until the autumn.

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