Increases in business rates will be capped at 2 per cent from next April, Chancellor George Osborne has announced.
Business rates would have otherwise risen by 3.2 per cent next year, in line with RPI inflation levels in September.
Osborne also announced a £1,000 discount on business rate bills for all small companies in premises worth less than £50,000, for the next two years.
In addition, the Chancellor will introduce a new reoccupation relief that will halve business rates for new businesses moving into previously vacant premises, which he said would help to reopen vacant shops on British high streets.
The Government has also extended the doubling of the small business rate relief for another year, until April 2015.
This means some 360,000 of the smallest businesses will continue to receive 100 per cent relief from business rates, with a further 180,000 benefiting from tapering relief.
Osborne said: “Business rates impose a heavy burden on businesses of all sizes. Today, we will help ease that burden.”
It follows lobbying by industry groups for a review of business rates, led by the British Chamber of Commerce.
BCC director general John Longworth says while the measures are positive, they are not strong enough to boost companies’ cash flow and investment.
He says: “The Chancellor should have been bolder, freezing business rates entirely until this pernicious tax can be properly reformed.”