Poundworld was reportedly denied a £4.1 million lifeline before it went into administration after it was unable to secure a cut in business rates.
The discount retailer fell into administration last week, putting more than 5000 jobs at risk.
Analysis by business rates specialist firm Altus Group has found that Poundworld, which has 335 stores, was unable to claim the money it was owed amid the government revaluation of the property tax in 2017.
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This was because the government set aside £3.4 billion to hand to businesses facing the most dramatic rate hikes, and this transitional relief was paid for by denying rate cuts to other firms.
Altus Group head of business rates Robert Hayton said: “Transitional relief should apply only to those bills which increase between one revaluation period.
“Where local economies are struggling and values fall, ratepayers need to benefit from the full reduction immediately.”
Earlier this week, the first round of job cuts at Ppundworld were announced, with almost 100 jobs at head office being axed.
On Wednesday, staff were informed that restructuring specialists Hilco had been hired to start stock clearances as administrators at Deloitte struggled to find a buyer.
Many retailers have blamed business rates bills for an increase in financial distress, combined with growing costs from the weakened pound, a squeeze on consumer spending, and the rise of online shopping.
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