The government will carry out a review of the future structure of business rates to report by Budget 2016. The review will be fiscally neutral and consistent with the government’s agreed financing of local authorities.

This follows a review of business rates administration, the interim findings of which will be published this December, setting out how it will respond to business’ calls for clearer billing, better information sharing and a more efficient appeal system.

This follows calls for reform of the business rates which are seen as punishing High Street business, particularly when competing with major international online retailers, and a drain on local councils unable to fill local businesses due to the scale of business rates.

‘I am announcing a full review of the structure of business rates, and I urge business groups to engage with us,’ the Chancellor George Osborne announced in his Autumn Statement.

‘Last year to help our high street shops, pubs and cafes, I introduced a new £1,000 discount on their rates. With the brilliant Small Business Saturday this weekend [6-7 December], I am increasing that help for the high street by 50% to £1,500 next year.’

This means that the current business rates support of £2.7bn for five years from April 2014 will continue to benefit 1.8m properties in England.

The measures include:

• support for small businesses by extending the doubling of Small Business Rate Relief to April 2016; around 385,000 of the smallest businesses will continue to receive 100% relief from business rates until April 2016, with around a further 190,000 benefiting from tapering relief;
• support for all businesses paying business rates by extending the 2% cap on the RPI increase in the business rates multiplier to April 2016; and
• additional support for the retail sector by increasing the £1,000 business rates discount for shops, pubs, cafes and restaurants with a rateable value of £50,000 or below, to £1,500 in 2015-16, benefitting an estimated 300,000 properties.

Phil Orford, chief executive at the Forum of Private Business, said: ‘Business rates have been an ongoing concern for a large number of our members, with 55% in a recent poll seeing this significant barrier to business growth. It is good to see that the Chancellor has agreed with our suggestions of short term measures to reduce the pain of excessive property taxation with continued a continued cap of 2%, a £1,500 discount for retail properties and an extension on Small Business Rates Relief.

‘While we also welcome the Chancellor’s decision to answer our repeated calls for a proper review of the system and the way in which it is calculated, the devil will definitely be in the detail. With the review scheduled for after the general election, we are keen to see all parties commit to making concrete moves to tackle an issue that many businesses feel has needed addressing for some time.’