The UK Government has handed smaller retailers – including independent PC and tech stores – a discount on their business rates.
For the next two years, every retail premise in England with a rateable value of up to £50,000 will get a discount of £1,000 on their business rates, Chancellor George Osborne announced as part of his Autumn Statement 2013.
Businesses will be able to pay their tax rates in 12 monthly instalments. He also promised ‘no rates at all’ for the smallest firms.
Increases in business rates are also being capped at two per cent from April 2014, instead of being linked to inflation. They were due to rise by 3.2 per cent next year.
Osborne reckons this could save businesses up to £3,375.
He said: "The people in these [retail] businesses epitomise the hardworking values this government supports. And we’re backing Britain’s businesses all the way.
"With Small Business Saturday this weekend, I want the government to do all it can to help them."
Businesses exempt from rates currently include farm buildings and land, fish farms, places of public religious worship and buildings used for training or welfare of disabled people.
A new reoccupation relief is also being introduced that will halve the rates for new occupants, in a bid to get vacant shops on the High Street to open again.
The British Retail Consortium (BRC) said the cap will help retailers invest an extra £90 million in the UK economy next year.
Ian Cheshire, BRC Chairman and Kingfisher Group Chief Executive, said: "We welcome this two per cent cap on business rates and the announcement on reform of the system with open arms.
"Immediately this will boost confidence in the sector, and help retailers keep prices low. It will safeguard 7,500 retail jobs next year, as well as supporting local communities by keeping more shops open. But this is about more than just a one year reprieve, this is an important first step towards a comprehensive reform of the rates system."
Helen Dickinson, BRC Director General, added: "The Chancellor has recognised that businesses are suffering and is right to listen to retailers’ concerns on business rates. The BRC has campaigned for a two per cent cap, and reform of the business rates system, and it is extremely welcome to hear it announced."
Additionally, the Government is abolishing the jobs tax on young people aged under 21. Employer national insurance contributions will be removed altogether on a million and a half jobs for young people.
The cost for a business employing a young person on a salary of £12,000 will fall by over £500, or a £1,000 drop on someone on a salary of £16,000.
"We’re not going to leave young people behind as the economy grows," Osborne added.
"We are going to have a responsible recovery for all."
The full Autumn Statement 2013 speech can be read here.