Business rates were set to rise by 3.2% next year, based on September’s Retail Prices Index measure of inflation. Mr Osborne said he planned to encourage small businesses on to High Streets by cutting £1,000 from their rates bill.
Firms will also be allowed to pay their rates in monthly instalments. The chancellor said the cap could save businesses up to £3,375.
The £1,000 discount will apply to retail premises, including pubs, cafes and restaurants, with a rateable value of up to £50,000 for two years. He also pledged help for the High Street by introducing a “reoccupation relief” – halving business rates for businesses moving into vacant premises.
In a separate move, the chancellor announced he would abolish employer National Insurance contributions for the under-21s from April 2015, with the exception of those earning more than £42,285.
Mr Osborne also promised to look at reforming the business rate system for 2017, a move many business lobby groups, including the BRC, have been calling for.